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What is Short Sale and More Info

By Quiblok Admin, on October 4th, 2010

Many people that are looking for deal in the real estate market are still left with questions like, “what is short sale?” A short sale is when someone’s property value falls below what they originally paid for the property and now they are stuck paying for a home that is worth less than what they bought it for. Needless to say that paying a mortgage on a such a property is not worth the money. That is when the home owner works with the bank or lender to find a buyer that is willing to buy the property for less than what was originally lent out by the bank.

If you are still wondering what is short sale, then a more simple answer would be that it is a situation when the bank is willing to receive less money than what they lent out for the property in order to avoid not receiving any money at all should the home owner file for bankruptcy or go into foreclosure. However, sometimes a foreclosure is the better deal for the bank or lender. Although the foreclosure means some hefty fees for the bank or lender, they may feel that they can get more money for the property if it goes to auction.

When an offer is taken back to the bank or lender for approval, they can take as long as they need to make a decision as to whether or not taking that offer is the best deal for them. They may choose to take as long as one to six to eight months to deliver an answer. That is why purchasing a short sale property can be very stressful. That is also why it is generally not advisable for first time home buyers or those who need to move out of their home by a certain date to purchase a short sale property.

Home Buying
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