subject: The Realtor Short Sale System At It's Best [print this page] Unfortunately, the economy is not what it used to be. Because of budget cuts or lay offs some people have found themselves without a job, and without the means to maintain their standard of living. People losing their cars, homes and other valuables has become a natural occurrence. While this is unfortunate to a home owner, the realtor short sale system has made it possible for the average person to fulfill a lifelong dream that otherwise may not have been possible.
A short sale is what happens when a homeowner cannot make the payments on a house and they put the property on the market to be sold. The homeowner makes an agreement with the lender to make a smaller payment than what is owed, and the lender agrees to release the lien on the property at a discounted price.
If a homeowner cannot make the payments and the house can't be sold in a certain time frame, then they run the risk of having the bank foreclose on the property. A homeowner doesn't want to lose their house, but they also usually want to avoid a foreclosure, and a short sale offers them another way out. A foreclosure would be devastating to the homeowners credit and future, so staying in the home while trying to sell it can give the homeowner a little extra time and piece of mind.
For a realtor this kind of transaction has it's pros and cons. With the spike in unemployment there has also been a spike in the market for short sales. On the upside, a realtor will have more listings and will be able to price houses lower than ever before, which makes property more tempting and more likely to sell. Also, when a buyer knows they are getting a property that is worth more than what they are paying for it, they are likely to buy quickly. This can increase their sales, their commission and their reputation. One downside for the realtor is that this kind of sale usually goes through a longer closing process. The realtor has to go through the bank with any offers, and everyone then has to wait for the bank to make a decision. This can drag on for months especially if there is more than one offer. There isn't a lot of quick back and forth negotiating. If the bank rejects the offer then the process starts over, and there is even more waiting.
The person most likely to benefit from this system is the future homeowner looking to buy. Homeowners that are looking to stay out of foreclosure are going to list their properties well below market value. This puts a first time home buyer, or any buyer, in a position to purchase their dream home which might normally have been an impossibility. The buyer ends up with property that is valued well over what they have paid, they already have equity in the property, and they have been given the opportunity to improve their circumstances just by purchasing a home at the right time. Not to mention that interest rates lower than ever which saves the buyer even more money.
Lenders are the last party involved in this arrangement. Lenders are usually willing to go along with a short sale because this keeps money coming in for the current property, and they do not have to sell the house themselves. They also usually receive breaks or incentives from the government for any short sale transactions.
There are a lot of people involved in a transaction like this and all sides involved have something different to gain. Everyone has to show a great amount of patience and acceptance, because a short sale is a long process.
The realtor short sale system steadily moves along while everyone waits for the market to turn around. There are pros and cons to this program, but at the very least it is offering choices for all that are involved.
