Following the recent collapse of the Real Estate market between 2006-2008, specifically in Southern California, almost 40-45% of the overall marketplace was comprised of distressed properties which included short sales and foreclosures.
In today’s Real Estate market, we are seeing more distressed properties than in recent years, this is why we are going to break down the basics of short sale so you can familiarize yourself with this process and know if it’s the right thing for you to consider versus letting your home go through foreclosure.
What Is Short Sale?
A short sale is when a homeowner is headed to foreclosure and one of the last options that they have before going through that process is short sale, or the bank allowing the homeowner to sell their house for less than what the homeowner owes them.
For Example: Let’s say that you owe the bank $650,000, but your home is worth $550,000, you’re upside down with the bank $100,000 so your lender must agree to take that $100,000 loss and let your home be sold for less than what’s owed to them.
Reasons for Short Sale
Sadly, short sales occur for a wide variety of reasons including job loss, divorce, the death of primary income earner in the family or medical bills, thankfully short sale is a real option for a distressed homeowner to turn to and avoid the consequences of foreclosure.
Why Is Short Sale So Important?
Short sale is important because it first benefits the bank and gives them the ability to get something from the sale of a distressed home now, instead of getting far less money that they would get if the home were to go through the foreclosure process, since it’s not been uncommon for many homes in recent years to sit vacant long periods of time and become “zombie foreclosures”.
Besides the obvious benefits that the lender enjoys from short sale, the borrower also benefits as well because they will see less damage to their credit scores and they may be able to buy another home again in as little as 2-3 years versus foreclosures where they may have to wait up to 7 years to buy another home.
Get Short Sale Help
At Fred Sed Realty we’ve helped many sellers over the years with the short sale process and we can help you as well.
To learn more about the short sale process contact us today by calling (800) 921-9231 or connect with us online through our website.