At ZecLee Properties we come across homeowners in short sale situations all the time. Short sales are very common in the current real estate market, and with a continuing drop in housing prices there are many more expected. If you have a house you need to sell in the Lehigh Valley, and you owe the bank more than your house is worth, this article will show you how to correctly approach selling it and get the best results.
What is a short sale and how does it affect me?
A short sale in real estate occurs when the proceeds from selling the property are not enough to pay off the balance of the mortgage, liens, or other debts against the property. The process can take months of negotiating back and forth with the bank, but once completed you will be able to move on with your real estate debt absolved, as long as you were correctly represented and protected.
Even though your debt will be settled with the bank, a short sale still negatively affects your credit report for a few years. The specific point drop in your credit score varies based on many factors, but it is a much better alternative than losing your house to foreclosure. A foreclosure will be on your credit report for seven years and will make it very difficult for you to buy or rent a house in the meantime.
Why would the bank take less than I owe?
Banks currently have an overflow of foreclosure properties. On top of that, the foreclosure process costs the bank a great deal of money. By agreeing to sell a house at a discount the bank may actually recoup more of its losses than if it were to go through the entire foreclosure process. Also, the less bad assets the bank has, the more money it can lend to earn interest. It is in the banks best interest to loan as much money as possible while keeping bad assets off of their books.
The banks also want to lose as little money as possible, and this is one of the many reasons the short sale process takes so long. With so many regulations and pitfalls to avoid you need to make sure you are represented by someone who has mastered the art of negotiating short sales while protecting their clients against litigation, foreclosure, and further pursuit by the mortgage holder.
Why you need the right person representing you
Due to the long-winded process of negotiating with banks combined with the overabundance of bank owned properties and scarce retail buyers, many short sales fail to complete successfully. The national average for closing short sales is around 15%. With so much regulation, such an arduous process, and an incredibly slow real estate market, many professionals are unable to sell and successfully close a short sale.
At ZecLee Properties we work together with an independent agency that closes over 95% of short sales in the Lehigh Valley area. If you or a loved one needs to sell their house and is in a similar situation, contact us today to see how we can help.
Contact us today to see how we can help.