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How to Avoid a Short Sale on Your Home?

By
Mortgage and Lending with HomeSmart

What is a short-sale property?

A short sale property is a piece of real estate that is being sold by the owner for less than the outstanding balance on the mortgage.

The lender agrees to accept the payoff amount in order to avoid foreclosing on the property and taking a loss.

Short sales are often used as a way to prevent foreclosure, but they can also be a good opportunity for buyers to get a great deal on a property. Some investors will try to buy a short sale property for a cash.

If you're thinking about buying a short sale property, there are a few things you need to know.Here are three things you should know about short sale properties:

  • First, the process can be lengthy and complex. Because the lender needs to approve the sale, it's important to have a real estate agent who is experienced with short sales.
  • Second, you may not be able to get financing for a short sale property. This is because lenders view short sales as higher risk, so they may not be willing to provide a loan.
  • Finally, it's important to be aware that the home may need repairs. Since the owners are typically trying to sell the property quickly, they may not have had time or money to make necessary repairs.

Despite the challenges, buying a short sale property can be a great way to get a good deal on a piece of real estate.

If you're patient and willing to work with the lender, you could find yourself with a great deal on a property.

Pros and Cons of Short Sale

Pros:

-Short sales can be a way to avoid foreclosure.

-They may allow you to sell your home for less than what you owe on the mortgage.

-You may be able to stay in your home during the short sale process.

-The impact on your credit score may not be as severe as with a foreclosure.

Cons:

-The short sale process can be time-consuming and complicated.

-You may have to pay a fee to your lender or broker.

-The sale may be subject to approval by the lender.

-Your credit score may still take a hit after the short sale is completed.

 

Overall, short-sale properties can be a good option for homeowners who are facing foreclosure, but there are also some potential drawbacks to consider. It is important to weigh the pros and cons carefully before deciding if a short sale is right for you.

 

Comments (2)

Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Mar 12, 2022 03:45 AM
Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Great information, the mere mention of Short Sales gives me the shakes.  We made it to the weekend.  rest up and be ready to tackle a new week, bill

Mar 12, 2022 05:14 AM