Short Sales.. Are they a good deal?

Short Sales...Are they a good deal?

For those of us who are unaware of what a short sale is, it's a term a bank or lender uses that simply means the lender sold the debt short of what was owed and accepted a loss.  So why would a bank take a loss on something like this?  The banking industry is highly regulated.  When a bank has too many defaults on there books it limits the number of new loans they can write.  Typically this is a 1:7 ratio.

For example: If the lender has a loan in default of $200,000, they have to keep $1,400,000 in reserves that they cannot lend out.  That is a large amount of money to be tied up.  Imagine if these lender have 200 loans in default,...Do the Math!!

Now it's making more sense to do a short sale rather than go into foreclosure, because the foreclose process can take up to 12 months in Minnesota.  Foreclosures often end up in poor condition due to lack of maintenance by the former owner. This can be time consuming and cost many thousands of dollars to get the property back up to selling condition, then the cost to sell it, will it even sell at market value....etc.  Take the hit up front, right.  This creates a good deal for you, the seller (no forclosure on there record), and a good deal for me, because it make me happy that I got you a good deal!

For more information on short sales, visit http://www.mnreia.com/.  As always you can visit http://www.webdigs.com/ for the best value in buying or selling real estate in Minnesota!