In today’s real estate market it is undeniable that America is feeling the impact of foreclosures. This trend has made the Short Sale a part of the everyday language of bankers and realtors alike. Therefore, it is important for buyers and sellers of real estate to understand the ins and outs of this trend.
In short, no pun intended, the lender accepts less than what the current owner owes from a qualified buyer. This idea of a short sale is intriguing for lenders, sellers, and buyers because it makes the best out of a bad situation for all parties involved. The lender does not lose as much money as they would if they foreclosed on the property. In addition to selling their home, the Seller may salvage their credit, while the Buyer gets a good deal. This is the main reason why this type of transaction is becoming more popular.
The primary disadvantage of this type of transaction is the inconsistencies from one financial institution to another. Banks are experimenting with the specifics of this process which can result in extended time tables for negotiating deals, while other lenders may hold the seller responsible for the net loss between the mortgage amount and sale price. Fortunately, the Foreclosure Alternatives Program has been established for lenders to grapple with these issues and create new parameters to reduce foreclosures. Reducing the number of foreclosures will strengthen many sagging real estate markets.Your options as a buyer or seller in today’s market have extended far beyond the traditional loan because of the increasing number of foreclosures. As an informed buyer or seller you can maximize your ability to benefit from today’s challenging market conditions. This is why choosing a Realtor who is knowledgeable about the short sale is a step in the right direction.
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