Short Sales 101 for Home Buyers

In today’s strained economy, it can be extremely difficult keeping up with your monthly bills. Add to that mortgage payments, and it could very well spell disaster. Nobody wants to go through bankruptcy or foreclosure; however, you may be wondering if there are any other options. The good news is, there is another option, and it is known as a short sale.

What is a Short Sale?

If you are having a difficult time paying your monthly mortgage payments, you may be able to apply for a short sale. Basically, this means that the mortgage holder will accept less for the home than what you owe on it. That said, you must begin the short sale process before any foreclosure procedures begin.

Why You Need a Real Estate Agent

If a short sale sounds like something you might be interested in, you need to start by contacting a real estate agent who has experience with the process. Your agent will handle everything for you by working with the bank to accept the short sale. If the bank agrees to a short sale, you will be able to pay less than you owe and the lender will mark your account as paid in full.

The Lender’s Investigation

Before the bank will agree to a short sale, they will conduct an investigation to determine why you are unable to meet your regular mortgage obligations. They will look to find out if something happened that you could not help, or if you are simply trying to avoid the debt.

After the lender finishes the investigation, they will then make their decision. The decision they make will be based on whether it will cost them more to sell the home through foreclosure or a short sale. Whichever way they can save the most money, is the method they will typically choose.

So, there you have it. If you are having difficulty meeting your mortgage payments, you may want to consider a short sale. It is best to consult with a real estate agent as they know how to best handle these procedures. In this way, you can avoid such things as bankruptcy and foreclosures.