Real estate: short sale?

A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on the most economic way for the bank to recover the amount owed on the property. With the recent housing crisis in the United States, many investors have seized opportunities to increase their real estate profits through purchasing distressed properties. Many new investors have also discovered that they can obtain properties for less than their market value and realize an incredible profit by reselling them. However, it is by far better to invest in REO properties than it is to purchase real estate via short sale or foreclosure. There are tools which can give the investment value of any given property with ability to predict how much appreciation it achieves in the coming years. For further information look into http://www.smartzip.com/info/score

A short sale is where the home owner is selling the home (with approval from the lender) for less than its mortgage. While these can be a good deal, a short sale does not necessarily mean it's a good deal. For example, if the seller was trying to sell the home for $200,000 but there are foreclosures or other similar homes (watch out for condition issues on foreclosures) that you could buy for $170,000, it's not a good deal even if the mortgage is $300,000. There are great deals out there, but you need to do your homework. Also, be aware that home values in some areas may come down further so be sure you plan on staying in the home for quite a while and stay away from Adjustable Rate Mortgages (ARMs) as refinancing may be a problem. Good Luck.

Ron

Sell My Note Guy

http://homebuying.about.com/od/4closureshortsales/u/Short_Sales_Foreclosures.htm Elizabeth Weintraub has written about short sales and foreclosures at the above link that is part of a larger excellent free online real estate primer. I recommend you bookmark some page in that primer because you'll use it again. RSVP if i can help further, REALTZ

It is said short sale is lesser of the two evils (shortsale/foreclosure).
To everything already writen I would like to add few facts:

People facing mortgage problems tend to choose short sale rather than foreclosure, because
short sale doesn´t have such a devastating impact on their credit score.

Short sale allows the purchase of a new property in case the owner does not miss any mortgage payments.

The chances of deficiency judgment with a short sale are lower compared to a foreclosure
as the lender agrees on solving the problem together

A short sale in real estate is not always a pleasant transaction.

There are many ways to lose a home but signing away ownership in a manner that destroys credit, embarrasses the family and strips an owner of dignity is one of the hardest. For owners who can no longer afford to keep mortgage payments current, there are alternatives to bankruptcy or foreclosure proceedings. This is the short sale.

As part of the negotiation, you might ask that the lender not report adverse credit to the credit reporting agencies, but realize that the lender is under no obligation to accommodate this request. Credit report status is not always negotiable.

A short sale is the opposite of what you think it is, it takes a lot of time to close on the property and the owners can steal anything not tied down before the house is yours.

I know this as we are trying to buy a short sale.

First the boat lift was removed and sold, it was in the listing.

Then the spa was sold, also in the listing.

The shed is being taken. Not included in the "will not convey" part of the listing.

They can take all the appliances and sell them too. Ceiling fans to counter tops.

You just never know what people will do before you close that property.

They are feeling the loss of their home and you are trying to take that away.

There is nothing you can do about it either, but walk away from the sale at the end.

I Agent who works with you will not want to keep showing you the property because the Agent knows that you can walk and they won't make the money they were hoping for once you close. The cost of gas and time to show you the property.

I don't like that part because we want to keep checking to see if anything more is missing.

This is the chance you take when buying a "short sale".