So you’re house is about to be foreclosed on, what are your options? One of the least well-know choices you have is to attempt a short sale. A short-sale is when the lender agrees to accept less than what’s owed on a mortgage that is secured by real estate. So in essence you sell your property for the going rate, or what the other homes in your housing market are being appraised for. As we all know, real estate is being appraised at much lower values today than they were just six months ago, so unless you bought your home yesterday, you owe more than it is worth now. Here are some benefits of a short sale.
First there is the obvious, you get out of the real estate your in before it gets foreclosed on. Second, you walk away free and clear with the mortgage lender. Another plus to this option is that you don’t have to pay any closing costs, and sometime the seller can get some extra cash for moving. Real estate appraisers are very helpful in this area because they are the ones who will do research what the property in your housing market is selling for and come up with a comparable list for the mortgage lender. Basically, an appraiser tells you and the lender what the home is currently worth.
Now, in case you think the seller is getting one over on the lender, think again. The mortgage lenders don’t want your home, they would much rather have the money. So by accepting a short sale, they at least get something, as opposed to foreclosing on it, which garners them nothing. True, the mortgage lender can turn around and sell it at auction, but they are more than likely to get even less than they would in a short sale. With the housing market being what it is, buyers at an auction expect tremendous deals. In fact, the lender is likely to lose 35 to 50 thousand dollars by selling a house through an auction.
But the people who I believe benefit the most are the ones who purchase homes that are doing short sales. Imagine being able to buy a piece of real estate from somebody who needs to get out fast. As long as you have good credit, a good real estate agent who can give you a heads up as to when and where there is a short sale taking place and a good real estate appraiser who can research the comparables and ensure that you are getting a good deal, you are on the road to owning a home at a great price.
If you are thinking about purchasing a home, refinancing a home, selling a home or want to figure out the current value of your home, please visit us at Mahler & Associates Appraisals