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Use the Following Information for Short Sale Purchases

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By : marco benavides    99 or more times read
Property buyers purchase short sale real estate for various reasons, but the main one is that it is usually a very good deal. However, just like in any purchase, there are things that you must consider before you go running after that great property listing you just saw in the newspaper.

In any event, just what is a short sale anyway? In simple terms, the lender is accepting less than what is owed on the property or what the property is worth in order to release the mortgage that it holds on the property. There are various reasons why a lender would do this, but it is usually done because the debtor could not keep up with the mortgage and he/she was probably facing the specter of foreclosure. A foreclosure usually means greater losses for the lender. Through the short sale, the lender is attempting to lose the least amount of money possible.

Now that you know what a short sale is, what else should you know? You should know that there has to be an agreement between the lender and the borrower to conduct the short sale. The sale of the property is subject to the lender’s approval. It can get really tricky if there are multiple mortgages or home equity loans on the home.

This is where it is advisable to consult a real estate professional before getting involved in the short sale and making an offer. The agent can investigate public records and find out who is on the title, if there is a notice of foreclosure, the amount that is owed against the home, the number of loans recorded and anything else you need to know in order for the short sale to go through. Some second and third mortgage lending institutions will get much less than the lender in the first mortgage position.

There are also some sellers who are uncooperative. There is a short sale package that sellers must complete and they are sometimes slow to complete the package. There are instances where the seller has never been told that it is mandatory to complete the package, so you have to make sure that the required documents are available. These documents include: The seller’s letter of hardship—the seller must write and explain the situation that brought him/her to fall behind on the mortgage or maybe stop paying it altogether. Tax Returns—these are required because it is necessary to know the seller’s financial position. In order to know the seller’s full financial position, the package must also include W-2s, payroll receipts, financial statements and bank statements. This is a minimum list of what should be included by a seller and why it is necessary to consult a professional.

A real estate professional can usually help you to avoid mistakes which can cost you time and money. Some mistakes may even cause you to miss out on that gem that you have been looking for all this time. All in all, it pays to be well-prepared and informed if you are going to get involved in short sale properties.
Are you looking for short sale real estate? You can try Best House South of the Border and Find out about Real Del Mar - Baja California.

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