Foreclosure is a big problem in the real estate market nowadays because lots of people have lost their jobs. One way to avoid foreclosure is to do a short sale. When there is no hope that a homeowner can pay his or her mortgage payments, a real estate short sale may be a sound solution for the homeowner. You do not have to wait until you are late on your house payments to start the short sale process. Learn about what is a short sale and ask your Realtor early about doing a short sale when you think that you might not be able to keep up with your mortgage payments soon.
Understanding What a Short Sale is
A short sale is a sale of real estate in which the proceeds from the sale are smaller than the balance left on a loan secured by the home sold. In a short sale, the bank or mortgage lender accepts an amount less than a loan balance because of an economic or financial hardship experienced by the mortgagor. This negotiation is done through communication with a bank’s loss mitigation department.
Stopping Foreclosure
A short sale is often done to stop the foreclosure process. Often a bank will allow a short sale if they think that it will result in less financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A short sale is typically faster and more cost effective than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. The process does not wipe off the remaining loan balance unless the bank expressedly states it in writing.
Learning about Short Sale
There are many books written about short sale. Some books are aimed at homeowners who are in foreclosure. These books explain to them what a short sale is and how it can help them save their homes from foreclosure. There are also books aimed at investors wanting to take advantage of the foreclosure market. Foreclosed homes are often cheap so new home buyers and new real estate investors can buy them fairly easily. Examples of books on short sale are The Art of the Short Sale, Short sales: An Ethical Approach, Doctor Foreclosure: The Secret to a Successful Short Sale, and Short Sale: A Practical Approach.
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Tags: foreclosure, foreclosure solution, help homeowners, prevent foreclosure, problems in real estate market, real estate short sale, short sale, stop foreclosure