The seller avoids foreclosure and is exempt from all or part of the mortgage obligation to the lender. The seller can get financial approval for another home more quickly after a short sale than after a foreclosure, and the recovery of the credit rating is faster, according to the mortgage lender Quicken Loans. A short sale means that they won't make any profit from the sale of the house; the bank or mortgage lender keeps all the proceeds from the sale. For buyers, the paperwork process is significantly longer in a short sale (usually up to 120 days) than in a traditional home sale (usually up to 45 days) and that can be a decisive factor for homebuyers.
Short selling can be beneficial to all parties involved. They offer greater investment opportunities for buyers and minimize the financial repercussions that both lenders and sellers would face if properties were to go into foreclosure. Let's take a closer look at the benefits for both buyers and sellers. A short sale or foreclosure is a catastrophic event for any homeowner and has serious legal, credit and tax implications.
The typical homebuying process simply requires the seller to transfer their capital to the buyer in exchange for the agreed purchase price. Contact your mortgage servicer. Tell them that you're interested in a short sale and want to know if you're eligible. On the other hand, a foreclosure is a legal action taken by a lender to seize a seller's property after the seller is too late in their monthly payments.
Before buying a short sale, you should make sure you know all the people or entities that have a property claim (called lien holders). When faced with a potential short selling situation for the first time, members are urged to consult with their broker, lawyer, and risk manager to determine the right approach in their particular market area. In a short sale, a lender accepts that they will not recover their outlay and is considered to be the best option than dealing with the bureaucracy involved in foreclosure and then going ahead with managing a separate transaction. As the economy has improved and the housing market has recovered, short selling has become less common.
Contact a licensed real estate agent. Tell them that you are interested in listing your home as a short sale (if you haven't already). Similarly, a short sale can dramatically reduce the amount a bank might be seeking to recover from the homeowner. On the contrary, the seller keeps what he can get because he doesn't know if the market will increase if he waits.
If they don't have a short selling request, find out what documentation they need to consider a short sale. It's also highly recommended that a short-selling buyer work with a real estate agent with a lot of experience in the short selling process. In addition, the foreclosure process can be expensive for the seller (and the lender) and ultimately force you to file for bankruptcy in some cases.