It is already known that many of the homes that have already been foreclosed on, were recently placed in the pre-foreclose procedure or have owners that are (in some way) falling behind on making mortgage payments. You, the reader, might have already experienced it, personally, or know some one who has. What many people don’t know is, that many businesses do not like dealing with the process of foreclosing on homes, one bit.
Banks are not part of the real estate business. It will do nothing for them, when they are undergoing the process of foreclosure; it is a waste of their expert resources (or attorneys) to kick a homeowner out of their house. Additionally, they don’t like being burdened with the worry of hiring the right contractor (so they can renovate and repair the home), and paying utilities and property taxes. They don’t particularly care for sitting and waiting for someone to buy their home, either. However, under these circumstances, banks are more than willing to work with prospective buyers, in the hopes that they can get their dormant property to generate income; so, if your credit report has stellar recovery complaints, or the like, banks still may be more than willing to work with you!
The one piece of good news is this: These past few months, banks are now willing to change the way in which they short sell property and allow people to get a loan. In a short sell, a lender normally would…
- Foreclose a certain property and pay all related holding fees, such as utilities, repairs and even taxes; and be able to carry the burden of handling and selling that property to you, in the end – in which case, you will still be losing money.
- Negotiate the existing loan, let the owner and the family stay in the house, provided that they keep their monthly payments on time – but you would still lose the money.
- Make a short sell on a specific property, and prevent taking control over that house & get it off bank’s books – however, you will also lose the money
The first two options are likely to happen. However, through modification of the loan, or short selling a property in a foreclosure, banks will remove the stress (as well as the expenses) linked to actual ownership of the property.
Well, let just start with the disadvantages of a short sale. It is a daunting task for you to negotiate on a short sale, through the traditional method. You have to consider all of the parties within the negotiation process – and this is where the process typically gets complicated. Parties you have to look out for includes the agent of the seller, the seller, the potential buyer, the agent of the potential buyer, the lender, as well as, the underwriter of the lender. There are instances where there are more than three lenders; if this is the case, be mindful that managing the paper work can get confusing. And getting chased by groups like convergent outsourcing debt collection agency, can only exacerbate matters, as they have the potential to file suit and derail everything.
Now that you know how difficult it can be for a short sale, now we can discuss the advantages. A short sale is actually an excellent option for the owner that has little equity in their house.
Enter the investor. When you choose to sell your house via a short sale with an investor, the chances for getting that deal accepted by the lender, will greatly increase. The reason for this is because there are fewer “parties” conducting the negotiations. Fewer “parties” means fewer concessions that need to be made, which means more people are happy, which means deals are approved.
This may cut out the realtor, since most of them are paid to assist in these situations. However, agreeing to a short sale, when done right, can expedite matters. And if one investor is leading into a short sale, instead of using a realtor, you may only need the presence of 3 to 4 parties (excluding the realtor).
Hopefully this explains how a short sale is performed. Take, for instance, that months ago, if you bought a property and you received a mortgage for more than a hundred thousand dollars – it can result in having financial leverage (in terms of a short sale), even though you have little to no equity in the house; and since the turnover for the short sale will be completed more quickly, creditors or debt collection agencies, can be taken care of (or paid off) in a timely manner – if they pose a problem, however, for whatever reason, go to www.cleanupcreditfast.org/tips/free-help
As of now, the seller and the investor would meet up and the investor would put forth options to purchase the home. This process is just a proof that an investor can wear many hats as a professional, in real estate matters, and, in many ways, alleviate matters for banks, realtors and home owners.