08 Aug Understanding What's Required In The Short Sale Process
Short sales often conjure thoughts of lengthy negotiations, tedious paperwork, and a never-ending closing process. Fortunately, mortgage lenders and the United States federal government are working to change this. As such, it is important for real estate professionals to understand how these changes in the process can ultimately affect their clients – whether the buyer or the seller.
One common misconception that should be clarified up front is “What exactly is a short sale?” This question can be most easily illustrated by explaining that a short sale occurs when the lender agrees to sell the home for less than the remaining loan principal.
One current perk for the borrower may be the $3,000 relocation assistance provided through the Home Affordable Foreclosure Alternatives (HAFA) Program. In addition to this upside, many lenders have created their own set of perk programs for borrowers. This is obviously something that a real estate professional should educate their client about, as it does often present a lucrative opportunity.
In addition, real estate professionals need to be aware of certain items that should to be considered when analyzing a short sale property, such as what major challenges may affect the client in this process. The potential of the borrower receiving financing and the estimated timeline are just a few details that could ultimately impact the client’s position in a short sale purchase.
Given the number of components that come into play during this type of a transaction, knowing all of the details prior to jumping in is critical. Also, keep in mind, lenders want to avoid foreclosures if at all possible, so a short sale can be a great deal for a home buyer if the circumstances are in line with the details of the property.