Short Sale Is Not A Quick Way Out Of Foreclosures

Posted in Foreclosure, August 21st, 2008 |

It is a misconception to think that a short sale is a quick way out of foreclosures – it is not so. Buying a property on short sale involves a lot of complications – the process consumes more time and energy than opting for any other kind of real estate. Southland real estate agents however are co-operating with potential borrowers so that in this foreclosure climate they can make the best bargain.

Andre Hooks a realtor working with Century 21 Masters in Walnut is frank with his customers. Buying a short sale property might take time – anything from two months to a year. It all depends on the attitude of the lender, usually the bank. But if the purchaser has the patience then a deal can be snapped up at bargain price. Foreclosures have made the real estate into a buyer’s market.

A short sale, put very simply, is the option borrowers threatened with foreclosure have. It can be executed when a default notice has been given but foreclosures have not formally kicked off. In the present market mood, buffeted by foreclosures, the value of the house has fallen to less than the loan amount. In such a situation the lender has to permit the short sale so that at least something can be recovered and the bank does not have to go through the time, energy and dollar consuming foreclosure process. The borrower by opting for a short sale avoids the ignominy of a foreclosure that will stain credit records for quite a few years.

Hooks advises that the potential buyer must bear in mind that the bank is ready to suffer a loss just to get the load off its shoulders. He also advises his customers not to spend funds on appraisals and inspections until and unless the bank gives the green signal for the short sale. The purchases should not throw away money but be on the guard. A short sale cannot take place without the written approval of the lender.

Realtors are commuting between those surrendering their houses and those looking for affordable housing. It is the fall out from the foreclosure crisis. The people just cannot keep up with enhanced mortgage payments.

Fontana has recently seen a spate of foreclosure listings. This has led to short sales but the procedure is something quite different from other types of sale. One realtor says, “It’s a different animal!”