Are you trying to sell or buy a property under short sale?
You probably must have heard the term “short sales” a lot in these past years. Short sales are something we hear more often when it comes down to the real estate area. Short Sale meaning isn’t something every commoner will understand. So, let us be more clear on the topic here. A short sale is when someone sells his house, with the awareness and approval of the mortgage lender for less than what he/she owes to the lender. If the lender accepts the terms, then you can proceed with selling the property.
For example, consider you’ve defaulted on the payments and your mortgage lender has filed a foreclosure in the bank against the property. Panicking won’t do anything when you are facing foreclosure. You can talk with the lender and put your property on short sale hoping for other buyers to buy the property. So, you owe your lender $500,000 but, the new interested buyer is only willing to pay $400,000 for the property. You might not be in a situation to pay off the difference amount too. So, convincing your lender to agree to a less amount than you owe is short sales.
Most lenders and banks agree to the terms as this is time-consuming and a lot of hassle. The final result is a win-win situation as the seller is no longer saddled with the debt and the buyer gets the property at a bargain price.
So, if you are selling or buying a property and are considering short sales in real estate, here are the top things you need to know before proceeding with short sales and fixing the deal…
Know the Difference Between Short Sales and Foreclosure
This is something most of you might get confused about. Short sales and foreclosure are entirely different scenarios. In a foreclosure, the role of the homeowner is slightly less than in short sales. People who try to avoid foreclosure by working out a deal with the lender or bank usually go for short sales. And there isn’t any tension about evicting the previous owners in short sales as in foreclosure. Well, things do get messy in foreclosure!
Unlike a foreclosure, short sales in real estate don’t impact your credit much. Still, it’ll damage your credit score but not for as long as the damage done by a foreclosure. You’ll even have the chance to apply for a home loan for two years while in short sales.
Takes A Lot of Time
A short sale doesn’t refer to the time involved as the whole term is somewhat misleading. A short sale can take up to five to nine months to close; sometimes even longer. If it’s the bank you are dealing with, don’t expect the bank to come to you and tell you how much it would accept for the property. So, what you must make sure of is that while negotiating with the interested buyer, you should get the price that has been approved by the lender or the bank for the property.
Finding a suitable buyer to buy a short-sale property or buy a short-sale house can be troublesome without the help of an experienced short-sale negotiator. So, the whole short sale process is time consuming and a bit nettling.
Make Sure You Are Eligible For Short Sales
Saving your property by avoiding foreclosure with short sales seems pretty alluring. But, have you cross-checked your eligibility for proceeding with the short sale services? You must meet all the criteria and might require written proof stating your eligibility from the bank or the mortgage lender. This itself will be time-consuming but have patience!
For being eligible for short sales, you must owe more money to the bank or the lender than the house’s total worth. If you are eligible for any loan modification, then you can rule out all the possibilities of a short sale approval. Written proof that states you can no longer afford the monthly payment and any proof of financial hardships, like being laid off or divorced or having excessive medical bills will make you eligible for proceeding with a short sale.
Make sure you pass all these eligibility criteria before even trying for short sales as this is full of hassle and time-consuming.
It’s Time You Consider a Helping Hand
Buying or selling the short-sale property will be a lot more troublesome if you are planning to go ahead alone. You’ll be facing a lot of pressure mentally and emotionally through the whole process. The first thing you need to do is find a trustworthy agent to sort out your problem. A real estate agent who’s experienced in every aspect of real estate can make a huge difference especially if you are selling short-sale property.
The short sale process involves a lot of legal procedures and paper works. It will leave you frustrated in no time. A Short Sale specialist who’s familiar with all these stages will help you push further without any difficulties. Well, the time flies, and you need to act more quickly in finding a buyer, or you can still face foreclosure.
Keeping your patience and confidence is the main key to every successful short sale. The right agent who knows his way around will be a boosting factor when going for short sales in real estate. Also, beware of the cunning smiling-faced agents who disguise and mislead you by offering a helping hand when you are vulnerable.