Why a Short Sale is best

by Bonnie Aletaha on January 30, 2012

Numerous homeowner’s speculate as to the reasons why a lender will take a lot less than the full balance due on a home loan, and the answer is really quite simple: it costs loan providers far more to foreclose on a property than it will to settle for not as much as the whole amount owed on a mortgage by using a short sale. So many struggling homeowner’s are facing the possibility that they could possibly not anymore afford their house, but to the particular loan company it’s just a cut and dry financial conclusion. However, luckily, it truly is in the mortgage company’s very best interest to partner with the home owner regarding how to best leave behind their house, and the majority of loan companies would prefer to approve a short sale as opposed to take a home back via home foreclosure.

Many troubled homeowners are frightened and don’t have any idea what is a short sale. Basically, a short sale happens when the mortgage company settles for less than the whole amount owed on the home loan as well as, consequently, frees the home owner of their mortgage loan debt liability. A great deal of homeowners do not recognize that a short sale is usually the best option for all parties included in the purchase. The loan provider is satisfied because they steer clear of a costly property foreclosure, the property owner is satisfied since they prevent the damaging results of going through a property foreclosure and the buyer of the short sale is pleased because they’re typically obtaining a residence at a 10-15% reduction from market price.

Another point of confusion for many homeowners is how to do a short sale. A short sale is not a complicated transaction. The first thing to do is find a qualified short sale real estate agent who knows how to work with the mortgage lender in negotiating the best outcome for the seller. The next thing to do is list the house for sale and submit all the necessary paperwork to the lender for review. At this point the lender will order a value of the property and will then review the purchase offer to see if it is in line with the market value. If the offer is in the range of market value, then the lender will approve the short sale and escrow is opened the same as a regular transaction.

There are also many rewards for homeowner’s that choose to undertake a short sale. One major advantage of a short sale is it is very likely that the home owner will get cash back at the close of the short sale. The cash back can come from the HAFA short sale plan, a cooperative short sale program, or even, often, investors allow relocation help to property owners that do not qualify for either HAFA or a cooperative short sale program. An additional benefit is the fact that a short sale in California gives the home owner a complete release of home loan debt responsibility letting them obtain a genuine new beginning.

A short sale can be scary for homeowner’s who have never heard of it, but when homeowner’s realize what is a short sale they quickly see that it is the best option for them to avoid foreclosure and get a fresh start.

Want to find out more about what is a short sale, then visit Socal Short Sale’s site on how to choose the best HAFA short sale agent for your needs.

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