Short Sales in Real Estate
When a homeowner owes more on a property than it is currently worth a short sale is an option. When lenders agree to do a short sale it means the lender is accepting less than the total amount due. A short sale is an alternative to bankruptcy or foreclosure proceedings.
A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company or companies to accept less than the full balance of the loan at closing. A buyer closes on the property and the property is ‘sold short’. These negotiations are often done with a licensed Realtor on the homeowners behalf. In the past it was rare that a bank or lender would accept a short sale however due to overwhelming market changes lenders have become much more negotiable when it comes to these transactions. Recent changes in policy within many organizations have made the chances of getting a short sale approved even higher!
Why would a lender accept a short sale?
One of the most common misconceptions that a very high percentage of homeowners have is that their lender is lying in waiting eager to jump out and take their home. Nothing could be further from the truth. Realty is that banks are in the business of lending money, not the real estate business, and they don't want to own your house.
In fact a foreclosure has far-reaching financial and regulatory consequences that most people are not aware of. The truth is that on average, it costs a lender $60,000 to $100,000 to foreclose and dispose of the average $200,000 property. This doesn't even take into account the opportunity cost the bank incurs by having assets tied up in the house. A short sale is a sure thing for a bank and the bank keeps the property off their books.
In order to start the short sale process a homeowner will need to seek the services of a Realtor who works with banks on a regular basis helping homeowners. There are only 1000 Certified Distressed Property Experts (CDPE) in the United States and a CDPE is one of the best chances a homeowner has to complete a successful short sale! There are NO FEES involved or costs to the homeowner, the bank pays all fees including closing costs, late fees and even attorney fees!
Check out our Foreclosure Prevention page to learn more.
If you would like to avoid foreclosure and explore other options, give us a call at 914-403-4868. Contact us right away before time runs out!