A short sale is a property that sells for less than the balance owing on its mortgage. A short sale can be an underwater, an apartment building or even vacant land. If there is a mortgage balance that is greater than the market value of the home, that property is a short sale.
A Short Sale is a Privilege, Not a Right. Not every property qualifies as a potential short sale in a bank’s eyes. A bank must agree to grant a short sale. Banks are under no obligation to approve a short sale. Banks will grant a short sale if the bank feels it is in the bank’s best interest to approve the short sale.
It is in the bank’s best interest to approve the short sale if the bank will make more money through the short sale than to foreclose. It is estimated that banks might save 25% to 30% on foreclosure costs to grant a short sale over a foreclosure, but some investor guidelines make it more profitable for the bank to foreclose.
When you spot a short sale house that interests you, take your hand off the mouse and step away from the computer. Before you get all excited over the prospect of buying that short sale house, pick up the phone and call your real estate agent. Your agent needs to research that short sale listing first.In some real estate markets, fewer than one in 10 short sales close. Just because that home is listed as a short sale doesn’t mean it’s really for sale (because it’s subject to lender approval), nor does it mean it will sell at the advertised price.Here are 6 things you need to know before trying to buy that short sale:
Are you thinking about Short Selling your home? Contact the expert Jean M. Sorel at 305.433.5686. He will tell you everything you need to know.