Short Sale vs Foreclosure
Sunday, August 16th, 2009Riverside Short Sale Realtor
Challenges That Face Real Estate Agents
By: Lance Thorington
The short sale is a way of selling a property facing foreclosure, and although it is not a legislated method, it has become a common business practice.
Essentially it is a way of selling a property when the home owner is experiencing extreme difficulty in paying their mortgage loan repayments and when there is little or no equity in the property.
Many investors are interested in purchasing property in a short sale, this is because they are able to bag themselves a bargain. Lenders allow mortgage holders to sell the property for as close to market value as possible, even if they owe more on the mortgage than the property is valued at.
This is a regular occurrence in the US with the massive amount of foreclosures available pushing the market values of properties even lower. Short sales and REO (Real Estate Owned) are presently making up over 40% of all real estate sales taking place in the US and more than this in exceptionally hard hit areas such as Florida and Southern California.
Both of these states have seen remarkable drops in the market values of properties in the past two years, and this is pushing many home owners out of their homes as they are no longer affordable. There is also no value left in the home for them if they sell it and there will be a shortfall owed to the mortgage lender if they sell. The lender is then able to pursue a default judgment for the home owner to pay any balance left outstanding on the mortgage after the short sale, although this is only applicable in some state.
The short sale has to take place with the permission of the lender, and only after the home owner has proved that they are in extreme circumstances. This is the reason why a realtor who are experienced in this process is required.
A win-win situation has to be created for all the parties involved in the deal and the bank want to get as much as they possibly can out of it.
If the home owner and realtor manage to pull off the short sale, the home owner will be in a far better circumstance than they would be if a foreclosure took place. This prospect’s incentive is for them to sell their distressed property at less than market value. They get out of paying a mortgage loan they can no longer afford and escape with their credit rating in tact.
This is invaluable because there is very little anyone can do in the US with a bad credit rating. It is recommended that a home owner who has undergone foreclosure, wait two years before applying for a bad credit home loan.
There are many challenge which face the short sale realtor, they really have to work hard for their money and it is being referred to in some real estate circles as the “Wild West”. However in the economic recession being experienced, it is necessary for them also to make a living, so they cannot pass up on these opportunities. House sales are down so they have to get whatever they can take
Author Resource:-> No challenge to big or small for Riverside Short Sale Realtor.
Article From RealEstateArticles4U.com