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What is a Short Sale?
How Does A Short Sale Benefit You?
What is a Short Sale?
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"A short sale is usually defined as a case in which a bank or other mortgage lender "discounts" the balance of the loan, usually due to a borrower's financial or other economic hardship. The property owner/borrower then sells the property at that lower price and the proceeds from the sale are turned over to the lender. Short sale may not always involve a property in foreclosure. Typically, short sales are done in order to prevent foreclosure."
(http://www.realtor.org/research/reinsights/marketintelligence)
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In the recent challenging housing market, with its dramatic declines in home prices and sales, severe credit crunch, and increase in the number of foreclosures, along with other market factors, many homeowners are facing financial hardship. In situations where a traditional sale or refinancing of the mortgage may not be feasible, foreclosure is not necessarily the only option. Short sales present home owners with another alternative solution for disposing of their property while sustaining only minimized damage to their credit.
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Short sales additionally create an opportunity for homebuyers who are were waiting for further reduction in prices and the interest rates to come down. A short sale is an opportunity where a seller may obtain acceptance from the lender for a lower pay off, giving a buyer the opportunity to obtain a property at below its' market price.
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Although successful short sales provide benefits to both sellers and buyers, short sales are often composed of substantial paperwork and lengthy and in-depth procedures. Consequently, the assistance of an experienced and knowledgeable realtor is essential to ensure the success of the process. Our team at Geo Properties understands that this can be a time consuming, frustrating and difficult course to take, and we are therefore prepared to make it as simple, easy and comfortable as possible for you. Our "Certified Short Sale and Foreclosure Specialists" are determined to streamline the process and guide you through each step involved with the sale. We are committed to: |
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- Provide an in-depth explanation of short sale procedures to both buyers and sellers.
- List the property.
- Market the property.
- Prepare current Comparative Market Analysis reports to determine appropriate value of a home.
- Negotiate with the lender and creditors.
- Handle the preparation and submittal of all required short sale documentation.
- Assist with credit restoration.
- Successfully close the deal.
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How Does A Short Sale Benefit You?
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Benefits to the Seller: Don't sell yourself short
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A short sale can be an excellent alternative to the painful, embarrassing and emotional process of foreclosure. The seller may obtain the optimum market value of the property and thus be able to maximize the sales proceeds that can be credited toward the loan default and other creditors versus going through a foreclosure auction where the sales price is unpredictable. Because successful short sales fully discharge mortgage debt, this method also has less impact than a foreclosure on a sellers credit score.
(Please consult with your tax advisor for tax implications and benefits of short sale.)
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Benefits to the Lender: A friendlier way to terminate the relationship
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Short sales can be beneficial to a lender because they reduce a lenders inventory of bank-owned properties on their books, minimize pressure from the government for the number of foreclosures recorded and provide a means of circumventing the lengthy and expensive foreclosure process. Because short sale properties typically sell for higher prices than properties that go to foreclosure auction, not only an optimum amount is credited toward the loan default. The higher sales prices obtained through short sales additionally help maintain and/or restore the market value of other homes in the property's area that the bank may also have provided financing for.
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Benefits to the Buyer: Getting the bargain
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When a short sale occurs the buyer is given the ability to acquire a property at a good value. Unlike foreclosure purchases at auction, the buyer is given an opportunity to perform a full appraisal and inspection of the property and is therefore in a better position to make an informed and sound decision before purchasing. In contrast, real estate purchased through a foreclosure auction is often sold uninspected and "as is," thus a buyer takes the risk of purchasing the property with unknown defects and faults.
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For more information and in order to determine if short sale is right for you please contact our Short Sale and Foreclosure Specialist. Every case is different and unique thus an in depth conversation and better understanding of your situation will help us determine the best strategy to approach your short sale and your success.
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