Short Sale-what the heck is it anyway?
A client in Crown Point, Indiana asked me today what is a short sale and I thought I would give you my take on the issue.
In today's economy many people are finding themselves up side down in their mortgages and this means they are heading for foreclosure. Being upside down means that the house is worth less on today's market than the seller owes to the lender. In order to avoid foreclosure they elect to try something slightly less damaging and that is where the short sale comes in. In a nut shell the home owner is asking the bank who owns their mortgage to accept less in repayment than they owe on the home. In some cases they are asking the bank to forgive the difference in what their home sells for and what is still owed on the loan, in some cases they are expected to take a new note for the difference.
Just being under water is not enough of a reason to be granted a short sale. The seller must also have some hardship which has made it impossible for the home owner to fulfill their obligation to pay their mortgage. Loss of job, health issues, divorce, or sometimes job displacement can be the reason. There do not seem to be any hard and fast rules to the short sale process. The banks have become more responsive in recent months to conditions which make short sale preferable to foreclosure but they are still moving on a case by case basis.
If you are a buyer and think you would like to consider buying a Crown Point, Indiana home in a short sale situation here are my recommendations. Make sure your buyer's agent knows the process involved. Make sure your agent ask the right questions of the seller's agent to see that the preliminary process is well under way. The process can be lengthy and the more that is done up front the easier it will be and the shorter the time to close. Most importantly be patient. If you need to move on a deadline-you might not want to do a short sale.
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Marilyn S. Tolhuizen, N W Indiana Real Estate Specialist
McColly Real Estate, Realtor, GRI, ePro
Crown Point, Munster, Dyer, St. John, Schererville, Winfield, Merrillville, Hobart, Portage, Hammond, Cedar Lake, Lowell, Lake of the Four Seasons, Demotte, Hebron, Wheatfield