Short Sales
What is a Short Sale?
A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.
In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank’s loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower’s financial situation.
A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economical way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as they are carrying costs associated with a foreclosure.
Foreclosure is expensive for a mortgage lender. Mortgage lenders are not in the business of foreclosing on houses. Banks and lenders are in the business of making loans. They don‘t want the house back. This is a business decision for the lender. Which means it has to make rational, logical sense!!?
As a buyer how does a short Sale help me? It will allow you to buy a house at below market value. As an example one house we have for sale has been appraised at $290,000 (in March 11) and the lowest price the bank will accept is $275,000 which is $15k below market value. Negotiations with the banks can take some time so you also need to be patient to get that low price.
This is what we can do to help you:
- We can facilitate the short sale process for you (buying or selling)
- Get your home ready to put on the market
- Market your home to get the best price possible in these market conditions
- Negotiate with the buyer and keeping you informed all the way
- Serve as your advocate and representative when dealing with buyers, buyers‘ agents and service providers.
- Help you establish a fair asking price that also meets your goals.
- Screen all written offers and discuss their advantages and disadvantages.
- Assist you in making counteroffers.
- Represent you at closing and mediate any last-minute obstacles to ensure a smooth, successful transaction.
Give us a call to have a 1 on 1 consultation.
Alan & Tasha Withers
Alan: 425-503-5901
Tasha: 425-241-0859
http://withersteam.com
