What You Should Know About Short Sales

What is a short sale? A short sale is a term that is commonly used by real estate agents. It describes a situation in which the proceeds from the sale of a property are less that the amount of money owed on a property. In many cases, this happens when someone is behind on their payments for a property. Because they have missed payments, and because they have been accumulating interest, they still owe a lot on that piece of property and want to avoid foreclosures.

If you’re going to be buying a home in the future, you’ll want to learn more about what a short sale actually is. That way, you can decide whether or not you would like to put in an offer on a short sale.

The Components Of A Short Sale

There are two main components to a short sale. First, the mortgage company has to agree to accept an offer that is less than what is owed on the property. This can only happen when the appraised value of a property falls below what is owed on a home.

It is unreasonable to expect a buyer to pay more than a home’s appraised value. Because of this, most lenders are willing to accept less than what is owed. If they do not agree to something like this, the house may not be sold at all.

Rules Regarding Short Sales

There is no legal obligation that requires a lien holder to accept the appraised value of a home. If the person that holds the lien believes that the value of a property is too low, they may wind up asking the seller to have the home appraised again.

When you put in an offer on a short sale property, you can’t just wait for the seller to accept your offer. You will also have to wait for the lien holder to accept the offer that you have made. This can be a long process. When everything is over, the lien holder may wind up turning your offer down.

Putting in an offer on a short sale home is always going to be a risk. You shouldn’t do this unless you have time to spare. The process can take quite a while.

Other Options

If you’re selling rather than buying, you may also want to learn more about short sales. If you’re about to put your home on the market, you will want to make sure that you are fully aware of all of the options that you have!

There are a lot of programs that will help homeowners that are struggling to make payments. You may want to look into these programs before you list your home. There is a chance that you may be able to avoid selling your property.

Now that you have a better understanding of short sales and how they work, you can figure out what you should do next. Short sales can be great for people that are making home purchases, but they can also cause problems. Make sure you know everything before you move forward.