What is a Short Sale? Six Things for You to Know
In a struggling economy, unaffordable home loans have increased home sales. A short sale is an alternative to a foreclosure, which allows the home to sell but at a significantly lower price. To learn more about the process, here are several key facts that explain how short sales work.
1. Short Sales are Easier than Foreclosures
During a short sale, the homeowner may be able to relieve their financial burden by avoiding an extensive amount of credit strain that is experienced with a foreclosure. Although they may not receive a profit from the home, they can get out from under property they are unable to afford.
2. It Can Be a Long Process
Although short sales are assumed to be a quick process, it can actually take anywhere from 60 to 120 days to complete due to the bank having to approve every step. Between negotiating inspections to accepting an offer, the bank can take their time and often prolong the length of the transaction.
3. Moving Too Soon Can Affect the Process
It may be tempting to hire professional movers to transport everything out of the home and into a new residence. However, moving prematurely is not a financially sound decision since you’ll still need to pay rent on the home. It’s important to ask your real estate agent where the short sale process currently stands to estimate when you should move.
4. A Short Sale Discounts the Property By Up to 50 Percent
To sell the house at a fast rate, homes are often discounted at 10 to 50 percent off of what the seller originally paid, which is an incentive for buyers to act quickly and make an offer.
5. It Requires a Special Real Estate Agent
It’s crucial to work with an agent that is experienced with short sales to prevent financial burdens or mistakes from occurring. An untrained agent will not have the knowledge on how to work with the bank, which could complicate the process and even prevent the home from selling.
6. Documentation Will Be Required
To begin the process of a short sale, homeowners will need to provide documentation or records to the bank to prove that they are experiencing financial hardship.
Although the short sale process is unique, it can relieve financial hardship for sellers and make it possible to avoid loss. By working with the banks and an experienced agent, it can mean having a smooth short sale and finding the right buyer.
Information credited to BC Alberta Movers, movers in Victoria, BC.