With the mortgage crisis threatening homeowners across America, more people are choosing to short sale their homes rather than face foreclosure. A short-sale is a sale of a home where the value of the home is less than what the own owes on the mortgage. The lender must agree to allow the homeowner to sell the home for the lesser price. The lender will either absorb the difference or the homeowner will agree to pay back the difference with a payment plan.
A short sale helps the lender and the homeowner. The lender chooses to take a small loss rather than deal with foreclosure, which can be costly and time-consuming. The homeowner can avoid foreclosure and a bad credit rating. Although, it will take a small hit, it is preferable to a foreclosure.
When a homeowner wants to go through the short sale process, he must follow the procedures for a short sale.
* Prove that he cannot make the mortgage payments
* Find a buyer for the home
* Get approval from the lender
A short sale works for the potential buyer as well. With the downturn in the real estate market, the buyer is getting a home at a reduced price. Any buyer willing to become part of the short sale process will need to find a home appraiser and check comparables in the area. This will help the buyer and homeowner when presenting the short sale request to the lender.
