In real estate, a short sale is a phenomenon where the owner of a home wants to sell his/her home but at a lower price. This happens when the homeowner is short on money that is to be paid to the mortgage. The owner also does not have the money for the payment of the commission and title.
Short sale focuses on the fact of avoiding the foreclosure of the home before the forcible repossession of the lender.
Anzo Marketing is trying its best to provide you with all the information regarding real estate as it is your reliable investment partner. With the help of this blog, we will try to provide you with the details of a short sale.
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Benefits of Short Sale in Real Estate
There are some benefits of short sales in real estate. Some of the advantages are mentioned as follows:
- With the help of short sales, it is easier for you to sell the property at a lesser price as compared to the price the owner is indebted to.
- At times there is a chance that the owner lets off the amount that is to be paid by the person to the homeowner.
- It is a safe method to get rid of your mortgage debt.
- It will also help in avoiding the foreclosure situation. It will not damage your credit score, so you can easily purchase again in the future.
Disadvantages of Short Sale in Real Estate
There are also some shortcomings of the short sale in real estate. They are as follows:
- If you want to purchase a property on an urgent basis, it is not a good option for you. The approval process for short sales takes quite a lot of time.
- In case of short sales, the current owner is not the only person to approve the sale or purchase of the property.
- There is no guarantee of the fact that the lender will accept your offer after approval. He may back off afterward as well.
- In the real estate business, it is important to keep yourself aware of the changing trends all the time. You can lose a better opportunity while you are busy negotiating the short sales.
- Bank approval is necessary for short sales. It is essential to check the approval status of a property before any kind of dealings to avoid any complexities in the future.
Real Estate Short Sale Process for Buyers
The following steps are involved in the real estate short sales process for the buyers:
Convince the Lender
A lender must be involved in the process of short sales. It is necessary to convince a lender to work with you. The homeowner needs to be very truthful and honest to the lender as it would help him/her. The reason for the financial problems should be unique such as loss of job, divorce, or health issues.
Avoid Unnecessary Purchases
To make your proposal more convincing, do not make unnecessary purchases. It will make your profile more convincing in front of the lender.
You need to avoid other such factors which can play the role of hurdles in your proposal’s approval. This will not give the lender an opportunity to reject your proposal.
You can also consult the higher authorities of the bank if you think you can continue the short sales. It is good to talk to the higher authorities rather than only to the customer services representatives.
Consult Professionals
To avoid any mishap and big trouble in your finances, do not start this process alone. It is always advised to get the assistance of professionals such as real estate consultants or property dealers in this regard. As they have gained experience in this field, they can always guide you in the matter.
Gather Documents and Find a Buyer
It is the task of the lender to gather all the legal documents that are required as evidence of your declining financial condition to the lender.
The lender can only approve your proposal if you provide all the correct documents and details. As a seller, it is your concern to find a buyer for your property.
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Submit Your Proposal to the Bank
At the end of this process, you have to submit the required documents, the buyer’s offer, and your proposal to the bank.
You must be very careful while letting the lender access all your financial information. Your lender needs to be very professional and experienced.
Conclusion
To conclude this discussion, it is clear that short sales have their own pros and cons. The real estate world is always up to new trends. It is important for the home seller to be aware of the changing trends and take advice from professionals.
