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Short Sale Information You Will Not Hear From your Lenders

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By : Roby Hicks    99 or more times read
Many can benefit from short sale. The lender can have the loan balance repaid although it is not the entire amount. The seller on the other hand is able to settle his obligation and move on. And finally, the buyer is able to purchase a property at a very low price. A short sale happens when the property value is less than the value of the loan balance. The lender has to agree to the sale before closing the transaction. It has to be approved by the lender because the payment that will be made to him is discounted.

Some people have mastered the art of short sale. However, there are still a lot of information that can be learned especially those that your lender is not telling you. One of the information they will not tell you is why they are taking a lot of time approving your short sale application. One reason is that they are not sure if this is the best option. Keep in mind that for them, this is the last resort. Before agreeing to it, they have to check all the other options first. They do not want to agree to it right away because they do not want to incur losses. They will check first if they earn more if they foreclose the property.

Lenders also change their processes. This makes it more complex for borrowers. If the process is more complex, then fewer borrowers will apply for short sale. The mitigation process changes as well. This lengthens the steps taken by the borrowers to have the short sale approved. This is why sellers have to wait longer. The processes changes because lenders are always trying ways to lessen the amount of loss they can incur.

Buyers should be aware of the long wait. Even if they made an offer, the process can still take a while. This is because the seller has to wait for the approval of the lender. It is essential for buyers to make an offer because this is required for the borrower to qualify. Additionally, the property could still be included in the listings of some real estate agents. This is why other buyers can still make an offer. If their offer is higher than yours, then they will most likely get the property. Although the property is cheap, they should bear in mind that the process is not simple. Aside from being patient, they have to be ready for the outcome as well.

Bear in mind that lenders are businessmen as well. They want to protect their investment. To do that, they need to negotiate the value well. They will tell you of the amount of money they will lose if they agree with the short sale when the truth is, they already earned from your previous payments.

Sellers do a short sale to avoid foreclosure. But the steps taken are not easy. They have to qualify first before they can sell the house. For a smoother process, they should see to it that all the requirements are met.

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