Short Sales Explained

We are here Some Short Sales Explained. Definition: Simply put, a short sale occurs when the market value of a home is less than the outstanding mortgage debt plus sales costs called a reverse. The mortgage bank(s) must agree to write off a portion of the outstanding loan resulting in a short payout. Short Sales Explained

Example of a short sale:

For example, if a house is currently worth and is selling for $400,000 with a total cost of sale of $20,000, and the total outstanding loan balance is $680,000, then the lender(s) must agree to pay the mortgage debt. reduce by $280,000 to close the short sale escrow. At the end of the sales transactions, the homeowner is debt-free and does not incur any sales charges as we ensure that the fees and charges are paid by the bank short Sales in Real Estate Investing.

Short Sales Explained

Why would a mortgage bank consider a short sale? Lenders often have such an option because, in the long run, they will usually get a higher percentage of their principal back as compared to forcing the property into foreclosure. In a foreclosure, the bank always loses more money, the Mortgage Bank runs the risk of neglect or damage to property, and additional delays and costs, and as banks dump the foreclosure properties onto the market below market value, this, in turn, lowers the market value even more. more. Short Sales Explained. Short Sales in Real Estate Investing.

Today, California lenders will not commit to a short sale until they have made it. a valid and firm offer to buy from a qualified new buyer and an expert broker/agent who can negotiate the deal. It is imperative to work with an experienced short sales specialist. as they will have to prepare a professional and complete package. An incomplete package or poorly put-together package will only slow down the already slow short sale process.