Short Sale Home – What Exactly Is It?
With the number of foreclosures continuing to rise, short sale home deals are in the news a lot, but what exactly are they? A short sale is when a lender agrees to sell a home that is in foreclosure at a price that is less than what is owed on it (short). Read on to find out how a short sale works and if it’s a foreclosure option you’d like to pursue.
When a foreclosure notice is filed against a homeowner because they are behind in their repayments and the loan is in default, foreclosure proceedings are started which often end with the home being sold to the highest bidder at a public auction.
Before it gets to the auction stage, investors or those looking to buy a short sale home of their own can approach both the current owner and their lender with an offer to buy the home at less than what is owed. Once a price is worked out which is calculated against the amount owed and what the current market value of similar homes in the area are, the lender is contacted with the short sale home offer.
The current owners must be able to prove to the lender that they are in financial hardship and can no longer afford the repayments for the lender to consider a short sale home agreement.
The interested buyers must also prove they have the money to purchase the short sale home either with a statement from their lender showing they have preapproval for a loan or with proof they have the money sitting in the bank to purchase it.
Regardless of whether the current owners are happy with and accept the offer, the final decision rests with the lender. It can take 4 – 6 weeks for the lender to make their decision.
If you’d like to learn how to buy a short sale home, you may be interested in the home study course we recommend. It’s an affordable step-by-step program that shows you exactly what to do and say when approaching the homeowner and lender, and provides you with all the paperwork you need when you go to purchase it. Click here to take a look now: www.foreclosuresrealestate.org/go/foreclosures.
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