Short Sale

Short Sale

Short Sale

 

Hi everyone. Value Post - Third Round 3 / 3
By Ido Neumann, accountant and financial planner

So today we will talk about Short Sale… what it is and what impact it has on us as investors ..

A short sale in the real estate field is when the owner of the property is in financial distress and sells the property at a reduced value from the mortgage balance on the property.
For example, a sale price is 110,000 when the mortgage balance is 125,000.

The money paid for the property, i.e. the 110,000, goes to the debtor (the lender, the bank in whose favor there is a mortgage, etc.), who decides to forgive the seller for the balance of the debt or continue to collect the balance.
Of course, the landlord must give his consent to the deal in advance and in writing.

Sometimes this process is long and reaches a period of one year, but it does not harm the seller's credit rating, such as entering a foreclosure process.

What is the difference between Short-Sayle and foreclosure foreclosure?

These are actually two financial options available to asset owners who are late / unpaid for their mortgage payments. The implications of each track as well as the timeline in each process are different.

Foreclosure is an act of the lender to seize the home after the borrower (who lives in the house) failed to meet the current payments or when the house is abandoned this is the last option for the lender, as the home is used as collateral.
In foreclosure the action is initiated by the lender to save his loan.
After he grabs the property he immediately invites an appraiser and puts the property up for sale in order to meet with the money as soon as possible.
The auction will take place mostly through auctions but there are other ways too.

A property owner who has undergone a short sale may, with certain restrictions, be eligible to purchase another home immediately. In most cases, homeowners who have undergone a foreclosure process have to wait a minimum of five years to purchase another home. A foreclosure is maintained on a person's credit report for seven years.

 

The short process Sayle does not guarantee the termination of the loan because the loan has 2 parts: the lien of the property, and the promise to pay the lender.
Therefore, the sale of the house actually covers only one area of ​​the original loan agreement, and therefore requires specific approval of the lender for the sale of such a process.

Short-sale properties are listed by real estate agents and real estate sites. Some ads will not specifically indicate "short-sale", so there may be hints within the ad, such as "subject to bank approval" or "give the bank time to respond."

An experienced real estate agent can make a big difference in terms of finding and closing such properties. Agents who specialize in short-sale may hold a special certification for the subject, a designation offered by the National Association of Realtors.
Holders of this certification have received special training in short sales foreclosures, qualifying sellers for short sales, negotiating with lenders and protecting buyers.

A short sale property can provide a great opportunity to buy a home for less money. In many cases, the homes are in reasonable condition, and while the purchase price may be higher than a foreclosure, the costs of arranging the home, repairs and renovations will be lower. But, because of the lengthy process, buyers must be willing to wait.

A short-sale house can be used in the BUY & HOLD strategy or alternatively in the FLIP strategy.

What is your experience at Short Sale?
In terms of process…. Locating and the like

Link to the original post in the United States Real Estate Forum on Facebook - Works on a desktop computer (To view the post must be members approved for the forum):
https://www.facebook.com/1885945295012997/posts/2197660853841438

The original responses to the post can be read at the bottom of the current post page on the site or in the link to a post on Facebook and of course you are invited to join the discussion

 

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Responses

  1. Some challenging things with short sale

    A) You are at the mercy of the bank, the seller of the house
    B) As we have noted here and rightly so many realtors have no idea how it works
    c) It's a bit difficult to convince the seller to provide everything necessary - a statement of what he has and what he doesn't have, and a letter of "risks"
    D) Today the house price reduction is not as huge as one tends to think
    E) You are not in control — and I like to be in the driver's seat, so ……
    Short sale
    Becomes very long sale

    Successfully

  2. From my experience most brokers have no idea how short sale works and this is one of the factors that causes short sale to fail. By the way the realtors if you ask the realtors if they have experience with short sale they will surely say but in practice they have no idea…

  3. A complex and complicated process that is not sure to succeed. All sellers and/or special lawyers are needed for this. The two or three times I tried I was exhausted long before the end. Can work well if there are special connections within the system and behind the scenes otherwise.. a mess.