In the economic situation faced by everyone today more and more people are losing their homes. Unable to make the payments the lenders are foreclosing on the property and reselling it. Some people are able to avoid the foreclosure by making a short sale. There are many Short Sales Articles on the market that will explain this procedure.
When choosing to have a short sale, the owner puts the property on the market, open to any offers presented. When an offer, which is always less than owed, is received it is presented to the lender. They have the option of accepting the offer or going ahead with a foreclosure. There is usually a minimum amount set by the mortgage holder.
This kind of sale is beneficial to both the mortgage holder and the homeowner as well as the buyer. It allows the homeowner to get out from under the burden of payments that are impossible to maintain, allows the lender to avoid the lengthy requirements of a foreclosure and gives the buyer a great bargain. While there is a loss to the lender, it is a situation where it is better to take what you can get rather than lose even more.
When a home owner wishes to have a short sale they contact a real estate person to list the property. This person will put it on the general bulletin for all realtors to see and show potential purchasers. There will then be the usual showing of the property. However, the minimum amount acceptable which is set by the lender but is open to negotiation.
Many banks are happy to see this kind of sale even though they often take a tremendous loss on the loan. When there is no foreseen possibility of the people in the house to make up back payments, or even make current ones, something has to be done. A bank or lender is only a representative of investors and must do everything possible to protect those investments or to take the smallest loss possible.
Investors are concerned about the number of foreclosure properties that are on the market. This makes these, and future foreclosures, difficult to sell, hence the acceptance of the short sale idea. For the prospective buyer this is a wonderful opportunity to obtain excellent properties at a low price, for the home owner it is a chance to get out from under an impossible debt and, for the lender, it is a chance to recoup at least some of their money.
The short sales program seems to be the only effective method of taking care of properties where the owner can no longer make monthly payments. Government programs which have been offered have done very little to take care of the foreclosure problem. Banks and lenders are willing to go along with the short sales as it takes care of the problem quickly and cleanly. Therefore it is a win situation for everyone concerned.