What Is A Short Sale?
In a perfect world a person would be able to buy a home, fix it
up, increase the value and sell it for a profit to move onto a bigger estate.
Well, as we all know the world is far from perfect and sometimes a house loses
value, whether it be because the surrounding neighborhood went to shambles, the
residents trashed the house or multiple mortgages were taken against the home.
When somebody sells their house but the proceeds can't cover the property liens it's considered a short sale. The short sales
are considered viable foreclosure alternatives because the lien holders accept
less than what is owed to them and release the lien on the house.
Who Benefits In A Short Sale?
Depending on who you ask, all parties either win or lose when it
comes to foreclosure alternatives such as a short sale.
The Seller – removes the lien on the house and won't experience
as much damage to their credit with a short sale compared to a foreclosure. On
the other hand, they don't receive any profit from selling their house and will
likely have to come up with some money to find a place to live.
The Buyer – a home will likely sell for less than what is owed
on it because it's in dire condition. This means the buyer will get a heck of a
deal but the house is essentially a fixer upper with a considerable investment
needed to bring it back to mint condition.
Why Doesn't Everybody Use Short Sale Assistance?
First of all, a short sale as a foreclosure alternative usually
doesn't happen unless the buyer is incredibly far behind in payments.
Essentially the short sale is the last option before foreclosure. Also, if a
homeowner has ever filed bankruptcy in the past a short sale is all but out of
the question. That being said, short sales are becoming much more of a common
occurrence as people look for foreclosure alternatives in a last ditch attempt
to save their credit.
Short sales are a great way for sellers who might not have been
prepared for home ownership to get out of the heavy burden that it entails and for
people looking to buy a home to get a great deal. As with anything pertaining
to the home, a person will have the best chance at success in either selling or
buying a property if they consult with a qualified real estate lawyer before
making any significant move.
