New York Short Sales and How They Can Be a Lifesaver
Dec - 26 - 2017
In the real estate business, you may hear the term “short sale” or “New York Short Sales”. It means a unique situation when a mortgage company accepts a payoff amount less than the full balance you owe. That can be a real lifesaver if, for example, you are facing foreclosure. But to make it happen, you need to find a buyer. Then the buyer needs to convince the mortgage lender to sell your home to them on those terms that fall “short” of the outstanding loan balance.
Why Lenders Agree to New York Short Sales
The lender realizes that after the sale is completed, the net proceeds won’t be sufficient to cover the balance due. So why would they agree to take less than you owe, and wind up losing money on the short sale? The reason is that foreclosure is usually even more expensive. The lender would rather avoid the long and complicated legal foreclosure process. If they can save some of that expense and effort by doing a simple and quick short sale transaction, they’ll come out ahead.
How Short Sales Work
The bank could repossess the home to resell it at a foreclosure auction. But a short sale could raise just as much money, if not more, without all that hassle. So, it’s a win for the bank. The buyer must submit their formal offer along with paperwork required by the lender, and then wait for approval. But if the offer is agreeable, the bank will authorize the short sale. That can be a lifesaver at the last minute for a homeowner who is behind on their payments and sliding toward foreclosure and eviction.
A Win-Win for Everyone
Most short sales are purchased by professional investors who have experience negotiating with banks and submitting convincing paperwork to back up their offer. They also generally like to pay cash for homes they buy, which is the kind of easy and fast transaction that banks often prefer. The benefit to the investor is that they can purchase a property at a fair price. They also get the satisfaction of knowing they saved you from foreclosure. Of course, it can be a win for you if it helps you avoid foreclosure and the potential for additional damage to your credit. You can get out from under the burden of your mortgage and start to rebuild your financial life in a more affordable home.
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