July 24, 2024

Business Bib

Business & Finance Blog

How does a short sale work and how does it benefit?

2 min read

A short sale is the sale of real estate by the homeowner for less than the amount due on the mortgage. It is a great deal for a home buyer to purchase the property within his budget. The bank or lender agrees to a short sale in order to recover a portion of the mortgage loan owned to them. A seller can demand a greater selling price (but less than the amount owed on the debt) and is not bound to accept the appraised value. If you are late on payments and facing foreclosure then you must sell your home in a short sale.

• Workflow of short sellers

It all starts with a home seller willing to sell his or her property to the buyer. Once a buyer agrees to make a short sale offer the homeowner than contacts his or her Bank and make an application to the bank asking for short sale status. Home sellers involved in the short sale have to submit several documents to their mortgage lender. Those include records of pay stubs, tax returns and hardship letter stating why you can’t fully repay your mortgage loan. The bank will then goes through your application and send out an appraiser to find out the full value of the property against the short sale offer. After all the procedures have been done the bank will then approve or reject your shop sale request.

• Hire a short sell retailer

Hiring a short sale retailer will be very much beneficial for you during the complex procedure of short sellers. The retailer will and work with lenders to make your case. They are experienced in this field and well versed with all the legal documents need for short sale.

• Benefits of short sell for a home seller

1)  It is an excellent solution to a home seller who has suffered a financial setback.

2)  It is highly preferable against any potential home foreclosure.

• Benefits of a short sale for the home buyer

   1) The buyer gets the home at a reduced price.

   2) There is no hectic negotiation in short sale.

   3) Very few people are involved in the short sale and hence there is less competition to buy the home.