What Is A Short Sale
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What Is A Short Sale?
According to The National Association of REALTORS, 30% of all real estate sales in the next 12 months will be distressed sales. This means that almost 1/3 of all sales will either be a foreclosure or a short sale. Most people do not understand what a short sale is or why banks are willing to do them.
A short sale is a way to avoid having a foreclosure if you can’t continue to make your mortgage payment and your home is worth less than what you could sell it for. A short sale results when the bank agrees to allow you to sell your home at market value and forgive the difference on the mortgage. Typically when the bank goes through the foreclosure and fix up process, they lose on average about 70% of the value of the property. This includes all of the seller closing costs the bank has to pay. The fact that almost 80% of foreclosed homes were never even listed for sale is proof that most people do not even know this option is available to them.
In today’s economy, most of us know of someone in this situation. Recently, I had 2 former clients lose their homes to foreclosure. Sadly, they never even mentioned to me that they were getting behind on their mortgages. In general we do not talk about bad financial times during the purchase of a new home, so these clients weren’t even aware that I have been doing short sales for the last 10 years.
I can help people in this situation. If you have a friend or family member that thinks they may lose their home, please have them give me a call. I can usually keep the foreclosure off their record and dramatically save their credit score. I am very good at negotiating with banks and the banks are eager to offer a short sale instead of foreclosing. This can also be done on rental property.
John Mick, REALTOR RE/MAX Capital City 512-401-9306
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