What is a short sale?
A Short Sale is when the lender agrees to accept less than what?s owed on a mortgage that is secured by real estate via a sale of the property to a third party. With this agreement, the lender releases the borrower from the mortgage, thereby preventing foreclosure.
What are the benefits of a short sale to the homeowner?
The seller wins by avoiding foreclosure by selling their home before the foreclosure auction even if they owe more than its worth. If they were to sell the house the traditional way with a realtor without a short sale, typically they would have to bring tens of thousands of dollars to the closing to sell their own home. This is not an option for them because they are in foreclosure and don?t have any money. The lender typically will pay closing costs & commissions in a Short Sale to avoid foreclosure.....the Banks do not want to own your home.
What are the benefits to the lender?
The lender wins because they are getting some of their bad debt paid off. You see, when a lender has delinquent loans on their books, it affects how much money they can lend out in new loans because they are regulated by the FDIC. So the more bad loans they can get rid of, the more good loans they can then go ahead and acquire.
Also by taking a home to auction, they can lose tens of thousands of dollars.
So it?s a huge cost savings to them to do a short sale before the auction occurs.
What are the benefits to the buyer?
The buyer can get a great price, sometimes below market value.
Dennis is a Certified Distressed Property Expert and also has his NAR Short Sales and Foreclosure Resource Certification. He has the knowledge & training to help.
For more detailed information on short sales please email or call 847.338.0180