Short Sales and Foreclosure Specialists Contact (239) 244-1649
What is a Short Sale?
- A short sale is the process
by which a homeowner can sell a house for less money than he actually
owes on the mortgage(s). This is done by the buyer or investor
providing proper documentation to the mortgage lenders to convince them
to reduce the mortgage balance to allow the sale. The mortgage lender
(or bank) actually takes a loss on the mortgage because the value of
the home has fallen below the mortgage balance AND the homeowner is in
a poor financial condition that will not allow him to continue to pay
on time. If the bank approves the discount on the mortgage, the home
can be sold for a lower price without the seller having to come up with
cash to cover the shortfall, and the mortgage is satisfied and the
foreclosure process stops.
- Why would a bank or mortgage
lender want to do a short sale?
- Banks do not want to own real
estate, they want to lend money and collect interest. When a bank takes
a property back via foreclosure, it is a long and expensive process and
often results in holding the property in their inventory as a
non-performing asset. Banks have a limit to the amount of
non-performing assets they want to hold. Once this limit is exceeded,
they have strong incentive to get rid of the properties at discount
prices. For a lender, doing a short sale avoids many of the costs
associated with the foreclosure process. Attorney fees, delays from
borrower bankruptcy, damage to the property, costs associated with
resale, property tax, insurance, etc. all must be paid by the bank
during a foreclosure. In a short sale scenario, the lender is able to
cut its losses by getting rid of the property faster. Again, this is
particularly true in Arizona right now, not only because the real
estate market is so slow, but also because the Florida foreclosure rate
is high.
We
never
charge an up front fee. All fees are paid by your lender, when we
succeed in the short sale of your property.
|
