Short Sale Information

WHAT IS A SHORT SALE?

A short sale is the sale of a property, with the authorization of the creditors, for less than what is owed on it. Short sales are done all the time. Whether it is the forgiveness of debt owed by a nation or an individual, it simply means that someone is willing to settle for less than what they originally anticipated. It's part of business. All lenders know that they will not win all the time. Risk and loss of capital is an anticipated cost in the lending industry. Changing economic conditions, conflicts, and Mother Nature are among some of the many causes of unforeseen situations that turn good lending contracts into bad. In the context of foreclosure on secured assets, a short sale occurs when debtors agree to settle their liens for a known amount of money as opposed to taking a chance at auction. Auction prices are often unpredictable and usually greatly discounted. Many lenders are willing to mitigate further risk of loss by making deals before auction. Bad debt is sold by lenders all the time. For instance, there is a huge market for unsecured credit card debt that is sold for pennies on the dollar to collection agencies. That's self-effectuated short sales. Lenders are more than happy to discuss resolution of aged debt. Their business is to lend capital, not dispose of foreclosed assets.

HOW I HELP YOU AND HOW EVERYONE CAN WIN?

Bad feelings are often associated with respect to people making money over the misfortune of others. There are countless scams in the finance industry that prey on vulnerable people. These scammers rush in and get out quickly. They don't build long term viable businesses that are good for a community. Contrary to what many think, there does not have to be a big loser in order to make money in the foreclosure business. It is a matter of choice. A valuable service can be provided that benefits both the property owner and lenders. People with predator mentality do not last long in this business. 

Undoubtedly, the issues leading up to foreclosure are stressful and potentially volatile for all parties. Unforeseen underlying problems often exist. A professional in the foreclosure business mediates a settlement that all parties can move on. In a short sale, the lender has agreed to settle the matter without further claims, and the property owner clears their obligations without the lingering negative effects of a foreclosure and subsequent garnishment of additional monies that auction did not bring. The professional will be thanked by all of the parties involved.

 Lenders would rather Short Sell then Foreclose on a property. In general, a lenders return on a short sale can be between 95-75%; in a foreclosure the lender is netting 50% and sometimes lower. Lenders are pleased because they have received the best return, borrowers are getting out of the debit, and the new home owner is getting a home of value.

 In today's markets, it is critical to understand properties in foreclosure.

The benefit of becoming well versed in foreclosure is being one of the few who are able to understand such transactions. Most real estate brokers do not want to work with or do not understand such listings. Because of this, it is easier to directly obtain listings or obtain listings referred by other real estate brokers. Many successful careers have been made out of this misunderstood market segment.