What is a Short Sale and who can it help?
Known as a What is a Short Sale and who can it help?, this real estate transaction is an attempt by the seller to avoid a foreclosure on their credit. The sales of the property fall short of the balance to the loan because the property owner has fallen into some financial hardship and would rather sell their property. In the end, such a sale benefits the lending institution, which attempts to save any loses before a potential foreclosure, the seller, who’s credit survives a major hit, and the buyer, who then is able to help the debtor in such hardships and still feel fine about gaining huge savings in the process.
In this occasion, the bank or lender takes into consideration the financial problems of a seller by discounting a loan. A bank or loaning institution realizes that if the property is sold in a foreclosure auction, the bank may not get its entire loan back, if it gets it back at all. The bank or lender then finds it to their disadvantage to have assets stagnate in their hands. The cost of foreclosure may result in a bigger financial loss than a short sale. In such a transaction, the lending institution determines the price of the property by appraisal, the amount that it can afford to lose, and has the final say in who the property is sold to. These institutions aren’t in the home selling business and therefore must also find a way to reap the costs of this situation.
Times have been more than difficult and many have found themselves drowning within loan payments due to a financial or personal hardship. Fortunately, banks have been accepting short sales from debtors in recent months. A foreclosure in Studio City can be a hugely damaging hit on the credit of any person. A short sale then allows the Studio City mortgager to survive the current economic climate and their financial hardships without affecting their credit in a major way. Once the current economic situation calms or once the debtor has passed the storms of their financial hardships, they are able then to invest in another property, possibly in Studio City, without the lost of this one affecting their purchase.
The complexities involved in a short sale can be overwhelming and to take this on as a seller of real estate in Studio City can be difficult. The Studio City seller must be willing to hand over lots of documentation and letters of intent before a lender will consider a short sale. It is then to a Studio City seller’s benefit to consult with a real estate agent experienced in short sales, but more on this later.
As a buyer of Studio City short sold property, the savings that one can gain from such a sale can be unprecedented. Banks and lending institutions are not in the business of selling homes and must find a way to make back their loss before having to take a property to foreclosure. Due to this, the savings to a buyer’s wallet maybe close to half of what they might usually pay. A loaning institution cannot afford to be picky in such a market. If they turn away a potential buyer of Studio City real estate, they may not see another for a year. There fore, it is to their advantage to consider all propositions on a Studio City property and since those who can afford property are far and few between, the lending institution is forced to cut the price of the Studio City real estate property. This then becomes a very profitable investment for a buyer, who will find their savings increased by deciding to purchase now more than later.
A buyer of Studio City property must still be weary of a bank or lending institution that attempts to convince the seller to refinance. Since that bank or lending institution has no agreement to sell, the buyer of a Studio City property may spend months preparing to purchase the property only to find that the lending institution has convinced the debtor to refinance. Some sure signs that the seller is willing to rid himself or herself of the property is if they had already moved out. This is why consulting with an experienced real estate agent can benefit a potential buyer from the beginning.
A short sale is a complicated process that cannot be taken on by an inexperienced person. A short sale’s complexities stem from the fact that many institutions require financial satisfaction. These may include more than just the lending institution. There may be many levels of signoffs before a short sale is processed and accepted. Many short sales fall through to the dismay of all those involved because a person without the experience to deal with such a complex process was utilized. In this case, it is then imperative to find a professional realtor that has had experience with such specialized real estate transactions. In this case, an experienced real estate agent such as Tammy Jerome, which has had many years of experiences with short sales, can be of a huge benefit to the buyer. Feel free to contact her at anytime. It is a call that can be of a great financial advantage to a buyer, as well as, a seller.