Short Sales – What Are They ?

Short sale, a term that just five years ago, you would never hear or know about. 

Once the bottom fell out of the housing market, mortgage companies were more inclined to accept a short sale versus taking a house back as a foreclosure. 

So what is a short sale?  In short,it is when a home is sold for less than the mortgage amount being held on the property. 

A good example would be when an owner owns a 3 bedroom 1 bath home.  Currently in the same neighborhood, similar homes are selling for $85,000.  The owners however still owe over $100,000.  They try to sell the home at the desired price to cover costs.  It sits on the market with no movement.  Usually the banks want to see the property listed for at least 90 days.  Once this time period is up at the higher price, the realtor and the home owner contact the lender to see if they will entertain a short sale.  If agreed upon, thee home is then listed for a lower price.

Because the values of many homes remains lower than their purchase price and the fact that many homeowners borrowed 100% and above on their mortgages; many homeowners are still upside down on their properties.  If they stay in the property their is no immediate impact,  But when  a couple divorces or needs to move to another area, the situation can come into play.

 

This information brought to you by your favorite realtor Mary St George, Associate Broker, Wine Trail Properties 315-719-8377

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Mary St. George