Do You Need A Real Estate Sale?
A real estate sale goes on every second of the day all around the country
. But more and more short sales are taking place in the real estate market. You are probably aware of the foreclosure crisis that has plagued the country over the past few years.
Many people have lost their homes to foreclosure or are about to have their homes foreclosed on. Foreclosure happens when the bank takes the property from the person who took out a loan or mortgage on his or her home because the loan payments were not made. In most cases banks can foreclose on land if the loan holder is three months behind on the loan payments.
In some cases banks can foreclose if a person is only one month behind. One solution to foreclosure is a short sale. In essence this is where the bank or the lender allows the property to be sold for less than the amount that is owed on the property. This is where the term short sale comes from.
You might wonder why the bank would agree to accept less money for the house than what is on the loan. There are a lot or reasons. Some make sense to the lay person while some seem to make no sense at all. But the bottom line, the bank must believe that a short sale is in the bank's best interest.
Banks today, have a very large inventory of foreclosed houses. The more houses on their inventory, the more money they lose. They are making no money on these homes as long as they hold them. On top of that, they have to pay for the upkeep. They need to pay for gardening services if the land is in a city that requires banks to pay for upkeep.
Many vacant properties are at risk for vandalism. Homeless people target vacant homes and live in them until removed by local authorities. So the bank might consider a short sale if it does not want another foreclosure on its list. The home owner needs however, to apply in the proper way for the short sale; it is not granted automatically.
He has to go through many steps before the bank allows the short sale. He has to submit a hardship letter and all the documents showing his annual household income. It is best for the home owner to employ an experienced real estate professional to put together all the documents needed to apply for a short sale.
You need not be behind in your house payments in order to apply for a short sale. A home owner does not have to wait to ask for the short sale.
One advantage to the short sale is that it extends the foreclosure process. Some home owners, because of applying for the short sale, were allowed to remain in their house for over one year or longer after the foreclosure process was commenced once they applied.
by: Ciara Leigh