Short-Sales are something that every real estate agent and consumer should be familiar with. Unfortunately for many people, in today's market there are more short-sales than ever. There are several things that people who work with these kinds of properties need to be familiar with. We'll cover what a Short-Sale is and how it might affect the homeowner, and we'll also talk about the things that happen as a short sale works its way through the purchase.
What Is A Short-Sale?
The simplest definition of a short-sale is that a home is sold, with the lender's approval, for less than the current owner owes to the lender. A short-sale may not always be the best option for the owner, and there are consequences to executing a short-sale, so the owner needs to carefully consider their options before choosing this route.
Is a Short-Sale the Homeowner's Best Option?
There are times when a homeowner doesn't have much of a choice in determining when they need to sell. For example, they may be having a financial hardship and simply can't afford the home any more, they could be going through a divorce, or they may need to move for work. Whatever the reason, when a homeowner finds themselves in a situation where they need to sell their home, and they owe more on the home than it is currently worth, they may be a candidate for a short-sale.
In many cases, if the homeowner's situation is temporary financial hardship, he or she may be able to negotiate with the bank to forego or forebear one or more payments or even adjust the interest rate until the financial situation improves. In today's market, you never know what a lender may be willing to negotiate. If the homeowner is unable to make an arrangement with the lender, then the short-sale may be the best option.