No Typical Short Sale Candidates

If you explore real estate industry statistics you immediately notice one thing – there are no clear patterns. One region has certain conditions while another has entirely different conditions, and nowhere is this more obvious than when you explore the figures related to short sales and foreclosures.

As a good illustration of this, “Short sales nationwide accounted for 3.8 percent of all sales in the third quarter,” says one major real estate industry report. And yet, that same report goes on to note that certain locations (such as Las Vegas, Orlando, and Sarasota) saw anywhere from 10.5 to 8% of sales being short sales.

What all of this adds up to is one clear truth: There are no typical scenarios where short sale candidates are concerned.

 

The Short Sale Candidate

There are people with multi-million dollar homes who are faced with the idea of a short sale negotiation with their bank and buyers, and there are people in tiny condominiums facing the same set of circumstances. The reason for this is simple – people who own these properties purchased “high” and then had to witness declining property values. Coupled with the major financial challenges that began around 2008, it leaves all types of people with mortgages described as “underwater”.

Essentially, all short sale candidates are usually those who have loans around 25% or more in total value than the estimated value of the homes securing those loans. This alone is a frustrating and financially paralyzing scenario, but then a lot of these same people also have financial difficulties making it tough for them to pay bills, including mortgage payments.

A Good Typical Solution

Though this means that the lead up or pathway to the short sale does have a lot of typical circumstances, no two short sale candidates are alike. Fortunately, there is that ideal solution to be found in the short sale, and this is where all of the similarities are found.

Why? Because the short sale process is actually very basic and straightforward. It has to be done with the full cooperation of the lender, but when it is arranged, it can prevent a lot of damage being done to the homeowner’s credit, and it can create a truly optimal outcome.

Many banks and lenders are struggling with a large number of “distressed” properties. These are bank owned or in foreclosure, and this often translates to those homes being abandoned. This can allow a long list of problems and damages to occur, and banks just want to avoid this as much as possible.

Those who are considering a short sale will be able to approach their lender (with proof as to why they cannot pay the originally agreed upon amount) and either do a loan modification or open the discussion about a short sale. Because of such a high number of mortgages facing foreclosure, and because buyers and sellers are more motivated than ever, many lenders are glad to readily discuss the option of a short sale – especially if a buyer is already interested.

This is why you’ll need to also get in touch with a short sale specialist before you head to your lender. This could be seen as the typical “step one” and would be ideal for any and all short sale candidates.

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