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Short Sales: The Growing Trend | Home & Garden

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Short Sales: The Growing Trend

Short sales currently make up over 9% of all real estate transactions nation wide and continue to grow. With this popularity we have noticed more people asking us if a short sale is right for them when they have to move. The first step is to understand a what a short sale is and how it can be used as a tool in selling property.

A short sale is a sale of real estate where the proceeds from the sale of a property will fail to satisfy the debt owed on the property's loan. It often occurs when the borrower cannot sell their home for more than what is owed, but the lender decides that selling the property at a loss is a better decision than initiating the foreclosure process. The short sale was previously reserved for people who fell delinquent on their mortgage, but now has become a more sophisticated tool for homeowners needing to remove themselves from a property.

The short sale process has been changed to assist buyers who are current on their debt payments, but need to move and sell their home because of special circumstances like relocation, illness, court order, or divorce. The short sale process is still available to individuals who are delinquent and pre-foreclosure, but they operate much smoother when the Seller is current.

A short sale is one of the most complex processes in real estate because we involve a lender as a third party. The complexity can result in extended times to close and can range from two weeks to four months after a binding agreement. The complexity does not stop with the paperwork required because there can also be tax consequences and credit implications. Therefore, anyone considering a short sale should consult a tax and/or credit professional to understand the ramifications.

Contact me at chris@sellectrealty.com with any questions.

 

 

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