Short sales are a process where a lender is willing to accept a mortgage payout from a third party with the amount being less than what is owed. The lender facilitates this sale for an owner who is financially distressed and is likely better off selling the property rather than fall deeper into debt and mortgage default. With the property sold below its value, the remaining balance on the mortgage is forgiven and not expected to be repaid.
From the lender’s point of view, a short sell is a good move compared to a default mortgage. Foreclosure would mean a big debt left on their doorstep and no immediate means for recovery. A short sale is the best way for the lender to get a significant portion of the mortgage back. Lenders, in general, would prefer avoiding a nasty foreclosure with its legal fees and drawn out process. Foreclosures have a negative impact on lenders and the real estate market. Under the right circumstances, it simply makes sense to initiate a short sale before the situation gets worse.
Shopper & Investor Advantage
With a short sale, shoppers and investors have a chance to acquire a property at a significantly reduced price in a volatile market. Short sales can involve residential and commercial properties of all types. If you are looking to expand your business, a short sale may be the way to go as a viable warehouse or office building could suit your needs. The home of a shopper’s dreams could be waiting on some short sale list right now.
There is only one true advantage for the seller. The short sale means getting out from under a debt they’ve lost control of. This is especially critical if the mortgage balance is more than the property’s appraised value.
If you’re interested in a short sale, get in touch with a reputable provider of services in short sales. It can be a complicated process and counsel of an experienced adviser will be invaluable.