Most Real Estate Sales are Short Sales
If you have seen the news or read a newspaper, or even online lately, then you know the housing market is in just as nasty a slump as employment, if not worse. If you have looked around for houses to buy, you’ve probably seen many “For Sale by Owner†signs in yards, or Realtor signs in yards of occupied houses. These are mostly going to be short sales.
A short sale in Real Estate is when a borrower cannot pay the mortgage for some reason, and the lender agrees to take less money than they owe on the property. Often, you will have to pay Agent fees to the Realtor, pay for termite and other home inspections, but this can still be great news if you are looking to buy a home. The price is often deeply discounted, and today’s interest rates are extremely low, most being under 5% for a 30-year loan.
Many people think buying houses like this as doing the poor borrower a wrong. In reality, they are really helping the borrower avoid horrible credit. In many cases, if a lender has agreed to a short sale, the original borrower can ask that the lender not make any adverse credit report about them to the credit reporting agencies. This is not always a request that is fulfilled, but the borrower can still attach a letter explaining the situation to their credit report. Short sales usually help you both win out.
