Whether you are preparing to purchase your first home or getting ready to sell your first home, you have probably heard of a short sale. This term is used to describe a home sale where the lender lets the property on the mortgage to be sold for less than the balance on the loan, thereby losing money. Short sales can happen for a variety of reasons, including financial circumstances, the condition of the property, and real estate market conditions. Here is the lowdown on a short sale and what to expect.
How Do Short Sales Occur?
Negotiating a short sale is something that some homebuyers are interested in doing, depending on the factors listed above. What types of things can cause the lender to consider or approve a short sale?
- The finances of the borrower
- The borrower is upside down on the house, meaning that the amount they owe on the mortgage combined with the value of the home is larger than the actual value of the house
- The value of the property at time of sale
- The cost that it would take to repair the property
- The cost of keeping up the property while it would be repaired for resale at a higher value
- The cost of publicizing and marketing the property
Why Do Short Sales Ever Happen?
Think of a short sale as a drastic pre-foreclosure measure by the bank. A short sale is a next-to-last resort, and they can occur in cases where the borrower has had an illness, a spouse passed away, they are in the military and unable to rent or sell the property, or several other reasons that are out of their control.
A Title Company You Can Trust: Colony Title
At Colony Title, we will help you through the process of getting your property’s title and help you avoid the pitfalls of hidden costs while you buy your home. We are also well trained in identifying any and all errors in public records and helping you resolve them. We specialize in real estate title insurance in both Maryland and Washington, D.C., and we will perform an expert title search, check through all past documentation, and examine records for any fraud or forgery. For more information on how we can get you into the home of your dreams, contact us online or give us a call at (410) 884-1160. To get more updates on housing markets and how to get into your home, follow us on Facebook, Twitter, LinkedIn, and Google+.