Sometimes people think that a short-sale is a property that is priced to move quickly, you know the seller needs to get out and they expect a quick transaction. Unfortunately this is not the case.
A short-sale is the sale of a property for less money than may be currently owed in mortgage to a lender. This can be a common way of avoiding foreclosure. Let's say a seller owes $250,000 on a home currently valued at $225,000. Even at the appraised value the owner would not be able to reconcile the mortgage.
When a bank looks at this type of deal they have to decide what will be better, selling in a short-sale or selling in a foreclosure. Right now there is strong incentive to avoid further foreclosures. Additionally, homes that have gone into foreclosure are often neglected, needing possibly costly repairs. In a short sale the bank may be able to recoup more money than in a foreclosure sale. The seller wins out as well by avoiding the financial consequences of foreclosure.
For buyers, short sales can represent good values. However, the road is not always easy. Expert advice and assistance with a short sale transaction is needed to ensure a smooth purchase. If you would like to learn how we can help you with a short-sale transaction, please contact us today. We are here to help!