For a person buying his first home, the term "short sale" could be quite strange sounding, but for anyone who is already familiar with home buying options in the real estate arena, a short sale can be the best option to finally attain one's dream of purchasing his own home.
Short sales will allow a buyer to possibly purchase a listed property at a significantly reduced price.
The short sale is really a tool for troubled homeowners to avoid possible foreclosure on their residence especially when they can no longer keep up with their monthly mortgage dues.
In simple terms, a short sale is a special real estate transaction where real property is sold for a price lower than what a borrower owes on the property.
If for example, an owner took out an 80% loan for a $300,000 home back in 2007, he owes about $240,000 on the property.
The housing and mortgage crisis in the past few years resulted to home values to drop drastically.
In some locations, the figure goes to as high as 30 to 45 percent, so that $300,000 home back in 2007 can only be worth $210,000 today.
Because the crisis is general and does not just involve the housing market, some owners may have lost their jobs or are getting less than what they used to make.
Lenders know that because of these, most homeowners are having difficulty to sustain their mortgage payments, so they try to map out the best deal in order to regain what they can from a particular mortgage transaction.
They don't want to be left with a property that isn't earning any income for them.
Very new home buyers are advised to work with a real estate agent or short sale specialist so they can come across great deals on homes and save a lot of money.
You can actually buy this $300,000 home for a hundred thousand less.
Normally, if you limit your thoughts, you would construe that it's just a $10,000 difference from it's present market value.
But think further, say 5 to 10 years from now and imagine how much this home will be worth.
Home prices are not slipping further - on the contrary, they are beginning to pull through.
It may really be one of the most lucrative purchases you'll make in your lifetime! It's a bit more complex to enter into a short sale transaction, but just like all other mortgage arrangements, you will first need to get pre-qualified and approved for a home purchase.
You might be equipped with the needed amount for an outright cash purchase, which can actually lessen the price further, but financial experts will recommend that you use this moment to step up your credit profile since it is a buyer's market in the real estate arena these days.
That means there are more individuals selling rather than purchasing homes.
So if you're a home buyer, the current market scenario is to your benefit.
Interest rates on home mortgages are a lot more stable, and no sub-prime loan brokers are around to lure you into sub-prime lending arrangements.
The seller's creditor also has to grant a short sale proposal you submit.
Negotiations can get a bit overwhelming for the first-time buyer, so it is best that you work with a short sale specialist since they have wide experience in these types of transactions and can find you the best deals you won't be able to arrive at if you relied on your own efforts.
Short sales will allow a buyer to possibly purchase a listed property at a significantly reduced price.
The short sale is really a tool for troubled homeowners to avoid possible foreclosure on their residence especially when they can no longer keep up with their monthly mortgage dues.
In simple terms, a short sale is a special real estate transaction where real property is sold for a price lower than what a borrower owes on the property.
If for example, an owner took out an 80% loan for a $300,000 home back in 2007, he owes about $240,000 on the property.
The housing and mortgage crisis in the past few years resulted to home values to drop drastically.
In some locations, the figure goes to as high as 30 to 45 percent, so that $300,000 home back in 2007 can only be worth $210,000 today.
Because the crisis is general and does not just involve the housing market, some owners may have lost their jobs or are getting less than what they used to make.
Lenders know that because of these, most homeowners are having difficulty to sustain their mortgage payments, so they try to map out the best deal in order to regain what they can from a particular mortgage transaction.
They don't want to be left with a property that isn't earning any income for them.
Very new home buyers are advised to work with a real estate agent or short sale specialist so they can come across great deals on homes and save a lot of money.
You can actually buy this $300,000 home for a hundred thousand less.
Normally, if you limit your thoughts, you would construe that it's just a $10,000 difference from it's present market value.
But think further, say 5 to 10 years from now and imagine how much this home will be worth.
Home prices are not slipping further - on the contrary, they are beginning to pull through.
It may really be one of the most lucrative purchases you'll make in your lifetime! It's a bit more complex to enter into a short sale transaction, but just like all other mortgage arrangements, you will first need to get pre-qualified and approved for a home purchase.
You might be equipped with the needed amount for an outright cash purchase, which can actually lessen the price further, but financial experts will recommend that you use this moment to step up your credit profile since it is a buyer's market in the real estate arena these days.
That means there are more individuals selling rather than purchasing homes.
So if you're a home buyer, the current market scenario is to your benefit.
Interest rates on home mortgages are a lot more stable, and no sub-prime loan brokers are around to lure you into sub-prime lending arrangements.
The seller's creditor also has to grant a short sale proposal you submit.
Negotiations can get a bit overwhelming for the first-time buyer, so it is best that you work with a short sale specialist since they have wide experience in these types of transactions and can find you the best deals you won't be able to arrive at if you relied on your own efforts.
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