Jerry Guy Buyers Agent Blog

A short sale of a real estate property refers to selling it when the asking price is lower than the amount due on a mortgage.

A short sale is often the result of a homeowner being unable to keep up with his mortgage payments.

Rather than force the property into foreclosure, a lender will sometimes opt for the short sale. For example, let's say a homeowner has $150,000 mortgage due on a house, and can no longer make his payments. He and the institution that holds his loan might agree to put the house up for sale for much less than that $150,000.

A short sale is now begun. Short-selling typically takes less time and is less expensive than foreclosure proceedings.

A short sale still takes longer than a 'regular' sale.

Multiple levels of approvals are commonly needed for short sales. Other debts that may be involved include a second mortgage or back dues to a homeowner's association. Agreement of still more creditors, such as tax assessors must be reached before a property can be listed on a short sale basis.

The wide array of possible creditors, parameters and processes involved in a short sale makes it a relatively complex and highly-specialized type of real estate transaction.

Not surprisingly, short sale deals have a high failure rate and often do not close in time to prevent foreclosure. Contiguous agreement between the lender and the homeowner is necessary for the house to remain on the market as a short sale. The homeowner may decide to try to retain the property through refinance, or he may simply opt for foreclosure. The bank may renege as well if they decide they want to continue negotiating with the current borrower, or if they disapprove of the sale price. As a perspective buyer of a short sale property, you will find that the process is in some ways similar to buying a foreclosed home.

The purchase of a home on a short sale basis is therefore subject to delays and usually is one of the longer real estate transactions in terms of time to completion. For this reason, among others, you should pay a price that is below market value when buying a short sale property. Before signing on the dotted line, there is a lot more to be done even after the status of the short sale has been verified successfully. You will need to have your funding readily available. It is just as important to have a short sale property inspected as it is to have any new home inspected.

You will need to check for any additional creditors, just to be sure. You will want to find out what similar homes in the neighborhood go for, as well as what the current owner paid for it.

Because there are so many variables involved in purchasing on a short-sale basis, handling one alone is not advised. Negotiating your purchase will be made much easier if you hire an experienced real estate firm that specializes in this area. It is also a good idea to request a buyer's agent for the transaction. The success of your purchase is the goal of this agent, use him well. Jerry Guy is a licensed Realtor who specializes in helping his clients find residences throughout the region, including the Brandon, Florida real estate and Tampa real estate markets. He has extensive knowledge of a range of properties including the highly-specialized categories of foreclosure, REO, Waterfront and Luxury Home properties. Whether you are undergoing military relocation or searching for homes in the Tampa Bay Area for sale to accommodate you and your family, our services can prove invaluable to your success. For more information, please visit Jerry's website at www.JerryGuyBuyersAgent.com.

Comments are closed.