Most people looking for short sale information don’t get the whole picture. They know about the seller, that they are probably upside down on their dream house, financially in difficulty and willing to lose all equity in their home just to be out from under the debt.
What they don’t realize is just how desperate lenders are to unload homes without having to foreclose. Lenders know exactly how bad the current foreclosure crisis is, accept the cold reality that a large number of their borrowers may end up losing their homes, and are looking for ways to cut their losses.
Why are lenders looking more favorably on short sales? Primarily because foreclosure is a painful process! It’s not only expensive for the lender; it is time consuming and entails a lot of extra steps. By approving a short sale, the bank can minimize expenses. Having a house off the market means having to maintain, insure and pay taxes on it until another buyer is found, and with the housing market in the toilet the chance of selling at a price that will recoup the money lost in the foreclosure is slim.
Overall, it’s more attractive to the lender to take the hit of a short sale, let the property transfer from one owner to the next, and stay clear of foreclosure proceedings. When more than one lender is involved, the process becomes more tangled, but a short sale is still an option.
The key to a successful short sale buy is having the right people on your team. An excellent short sale specialist as well as a solid lender can help you complete a successful buy. Small banks or credit unions typically make the process go faster, but larger banks are more likely to approve a short sale loan.
Remember, the homeowner’s lender is motivated to make a deal, so ensure that your own lender is equally ready to have your back and make the deal happen. Lots of short sales fall through due to timing, so have an specialist on hand to help ensure the best possible outcome!