Tips To Finding Short Sale Properties
The following is a guest post contributed by editors at SmallBusinessLoansDirect.com.
The Sub-Prime Meltdown of 2008 has created quite a dichotomy for people buying and selling homes. For those selling a home, current housing market conditions are a complete nightmare. Homes are still down over 30% from their peak value in many metropolitan areas around the United States. Millions of Americans who bought homes at the top of the market in 2005-2007, are now underwater, which means they owe more on their homes than the home is actually worth in current market conditions.
This has led to a record number of foreclosures and short sales. This scenario leads to the second part of our dichotomy. For those in the market to purchase a home, current housing market conditions are a dream come true. We are definitely experiencing a buyers’ market.
One of the greatest ways to take advantage of the extreme supply of homes on the market is to search for homes that are being sold as short sales.
What Is A Short Sale?
A short sale essentially involves the sale of a home for less than a homeowner owes on the mortgage. Of course, usually when a person cannot pay their mortgage because they became too overextended by taking out a small business loan, personal loans and other debt obligations, they are forced into foreclosure. However, foreclosures are very expensive for banks to process; therefore, depending on various terms of the loan, amount owed, housing value, etc, at times it is in the best interest of a bank to simply move the home into a short sale process.
A short sale is generally advantageous for the homeowner and bank. For the homeowner, he will not have a foreclosure on his credit rating. A short sale will still show as a debt settlement on his credit history, and it will negatively impact the score, but it is possible to regain credit within 18 months after the short sale. For the bank, it will save thousands of dollars in fees by not letting the property go into foreclosure.
What About The Buyer?
Now, the buyer is the real winner in the short sale process. In current market conditions, short sales could be available for a 50% of the homes high water mark appraisal. However, finding short sales and financing them can be more challenging than a traditional home purchase.
Get An Agent
Finding an agent that specializes in short sales can be a brilliant move. Even if the agent charges a bit more than normal, it could lead to huge savings in the grand scheme of things if the agent is really an expert. An agent can help you in the negotiating process and help you find the best short sale properties available in your area.
With thousands of foreclosures and short sales on the market in the United States right now, we are truly experiencing a buyers’ market. Check with a real estate agent in your area or search online to begin finding ridiculously low-priced properties.