A Look at short sale Sales

We are hearing the term “Short Sale” in Real Estate today more than ever. Just what does it mean when you become interested in a property listing presented as a short sale? A short sale occurs when a home is sold for less than the value of the mortgage. After a short sale is closed, the balance that remains and owed to the lender is usually paid either by PMI (mortgage insurance), the borrower, or it is written-off as a loss by the bank. Purchasing a short sale can be profitable. Before venturing into a short sale deal, do a little research and pay close attention to the various stages before the sale is conveyed. You will want to research sales comparables in the area before making an offer. Some properties contain first and second mortgages, not really a problem if both liens are owned by the same lender. Things can get complicated when the holder of the second mortgage expects to be paid in full when the sale goes through. Negotiations during the process could derail or delay the sale when offers get rejected. Consult your real estate agent to find out the number of liens attached to the short sale property you are interested in. Avoid “low-ball” offers because the lenders are already establishing a loss when short sale properties hit the market—low-ball offers are almost always rejected.

If you need help selling a Real Estate or purchasing real estate please contact us at 760-880-9996 or 760-541-7006.