How does a short sale work?

Posted on: August 26th, 2016 by

The Houk Group is thoroughly versed in short sales!

A short sale is selling a home for less than the amount the current owner owes on the loan.

Whenever someone is buying a home that’s a short sale, it’s different than buying a property actually owned by the bank.  An REO, or real-estate owned property, is a term anyone shopping in today’s market needs to understand. Short sales can be great deals for buyers and can help sellers avoid full foreclosures on their credit histories. The damage to a person’s credit score  can be minimized by a short sale versus having a foreclosure reported not paid in full.

With short sales, proceeds from the transaction are less than the amount owed for mortgage debt and selling costs. For a deal like this to work, everyone owed money must agree to take less than owed or sometimes, no money at all. These can sometimes be very complicated transactions that fall through.

The government recently announced an extension of their housing rescue plan. This plan could make it a lot easier to buy short-sale properties. The Making Home Affordable plan pays lenders up to $1000 if the short sale of a property is allowed even when the owners don’t qualify for loan modification. This program may not help with properties that have multiple liens.

Contact us immediately for further inquiries and information on qualifications.

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