Real estate short sale" is a popular phrase
A surprising number of people are using the phrase "real estate short sale" currently and that has drawn a number of curious people to wonder what all the commotion is all about. Anyone who has read newspapers or watched TV has probably come across some sort of stories about the declining real estate market leading banks to consider real estate short sales as an alternative to foreclosure.
A real estate short sale is the name given to the process where banks allow properties to be sold for less than the amount owed to them. There are two conditions that must be met before a bank is likely to approve this: Firstly: Market values are such that the property's sale price cannot cover the outstanding mortgage balance(s). A further condition is that the owners of the property must not be able to continue making mortgage payments on the property.
Let's look at an example property that was bought five years ago for the rate of 217,000 dollars with an adjustable rate mortgage. Additionally, the owners took out a second mortgage of 10,000 dollars, which brought their total owed to 227,000 dollars. Remember that in five years the amount that the mortgages would have been paid off is negligible.
In avoiding time delays and expenses, the bank will probably decide to go with a short sale. This is because the banks believe it is better to accept a definite amount of money now than to wait on an unknown amount of money that may materialize in the future.
The bank may decide to save expenses and time delays that a foreclosure would cost by simply allowing a short sale. Banks do this because it allows them to accept a definite amount of money and because it allows them to get the property off their books. If the lenders and owners do not agree on the terms of the sale, complications can result, but in general, that is how the real estate short sale works.
Admittedly, many owners may find the real estate short sale a very painful experience, but things could be much worse for them. A foreclosure, for example, would be far worse to have on your credit report. On the other hand, a truly savvy investor can take advantage of these short sales for excellent buying opportunities.
A real estate short sale is the name given to the process where banks allow properties to be sold for less than the amount owed to them. There are two conditions that must be met before a bank is likely to approve this: Firstly: Market values are such that the property's sale price cannot cover the outstanding mortgage balance(s). A further condition is that the owners of the property must not be able to continue making mortgage payments on the property.
Let's look at an example property that was bought five years ago for the rate of 217,000 dollars with an adjustable rate mortgage. Additionally, the owners took out a second mortgage of 10,000 dollars, which brought their total owed to 227,000 dollars. Remember that in five years the amount that the mortgages would have been paid off is negligible.
In avoiding time delays and expenses, the bank will probably decide to go with a short sale. This is because the banks believe it is better to accept a definite amount of money now than to wait on an unknown amount of money that may materialize in the future.
The bank may decide to save expenses and time delays that a foreclosure would cost by simply allowing a short sale. Banks do this because it allows them to accept a definite amount of money and because it allows them to get the property off their books. If the lenders and owners do not agree on the terms of the sale, complications can result, but in general, that is how the real estate short sale works.
Admittedly, many owners may find the real estate short sale a very painful experience, but things could be much worse for them. A foreclosure, for example, would be far worse to have on your credit report. On the other hand, a truly savvy investor can take advantage of these short sales for excellent buying opportunities.
posted by Debt Consolidation Loan at
1:13 AM
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