Short sale homes are growing into quite popular in Phoenix, Arizona in today and age. With a troubled economy and an incredibly weak housing market, short sale homes have flooded the real estate market. Let’s examine short sale homes from the perspective of all three parties involved, the customer, the buyer, and the lender that holds the mortgage note. First responsibility, what are short sale homes? Short sale homes are better understood if you are aware what a short sale is. A short sale is when a house owner sells their home for less than the amount required to pay off the existing mortgage. Short sale homes normally have an “upside down” mortgage, which means the house is worth less than the mortgage. As an example, consider Home Owner A in Phoenix, AZ. [] G, bought a $150k home for $150k. He took out a mortgage for $125k. Unfortunately only one, because of the poor housing market, the home is not worth only $85k. Home Owner A does not like the fact that his mortgage is upside down and he is paying for on a $125k mortgage for a house that only has a value of $85k, so he decides to short sell his house. This situation has created the area of interest market overloaded with short sale homes. Short sale homes let the owners sell the property at its current market price and get away from it preventing foreclosure. It is not to good to be true, although it may sound that way. Turning over, it can profit to all parties engaged. -The owner of the home has the chance to sell his home that’s not worth as much as his mortgage anymore. With short sale homes, the bank might forgive the remainder of the debt (you’re asking why would they do that? Right?) Also, by selling the home and staying out of foreclosure with short sale homes, the home owners can keep restore good credit in a short while and buy a new house in a couple of years or sooner. -For lenders that agree to short sale homes, it is not the best situation, but, it is an improved situation than if they’d to go to foreclose with all of the homes that possess defaulting mortgages. So, lenders, in most cases, approve short sale homes. [] they’ll forgive the remaining debt on the mortgage to steer clear of taking the home over and needing to foreclosure sale it. Properties that banks are in the money business. They don’t want to own real estate EVER. Every home foreclose expenses them thousands of dollars in legal fees and processing. Also essential to think about, the foreclosed home will get a smaller offer price at a foreclosure auction than it would when they allow short sale homes. -For the buyer, short sale homes are a fantastic chance to get a property that is in relatively good condition for a steal of a price. [] that the home owner has not abandoned the home in poor condition since they may in foreclosure. Short sale homes give all parties, the buyer, the seller, and the lender the best outcome from a hard situation.
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Tags: Foreclosure, loss mitigation, short sale