Misfortunes concerning the economic status of many countries are currently experienced.
Such paralyzing conditions have brought about damages to many industries.
Especially in the United States, there are several real estate markets hard to recover from year-over-year slumps.
There are massive foreclosures and bankruptcies.
Conversely, there are solutions.
One of which is through short sales.
Short sales may be a new concept to some homeowners.
So you could benefit from further knowledge of this process, here are some vital information: Short sales could be considered more beneficial than foreclosures.
Your credit report would be gravely affected if you have previous record of bad debts.
More troubled homeowners choose short sales.
Phoenix real estate market reports there are 6,000+ short-sale homes sold.
There are only 3,700 foreclosed properties sold.
When the lending agency approves of the short sales, it would fall short of the loan balance.
You and your lender would enter an agreement regarding the loan payment and discount.
Before the discount is given, there would be loss mitigation as required by your lender.
This process would be through a workout department or an independent firm specializing on short sales.
Note that the loss mitigation should be done by a third party.
The lending company is the sole deciding factor in approving the deal.
If there are more possibilities of easier expenses recovery, the deal would be readily approved.
Losses would be calculated basing on many property factors.
These could be on the equity amount estimation, price opinion from a certified broker, and home valuation via appraisal.
If these are assessed to be more profitable for the lender, then you look forward to entering the deal immediately.
The sale proceeds are to be then directly given to the lending agency.
This is because the loan balance was discounted and any profit would be aptly due to your lender.
Here are some more details about the short sale process: Usually, this takes some time.
In case that a big bank is your lender, then the process would be lengthier.
This financial institution has intricate organization.
Thus, all departments involved in your loan would have a say in the approval.
You may have to repeat some paperwork.
This is in effect of the various departments that may require legalities furnished before anything proceeds.
Conversely, this poses less stress and expenses.
Some lenders even prefer this option because foreclosures have various stages.
They need to take care of proper issuance of Notice of Defaults, taking charge of Auctions and overseeing the foreclosure sale.
You may be saved from further expenses.
As your loan is discounted, you are relieved from seeking more loans to finance your debts.
The lender may allow you to refinance so you could still keep ownership.
The lender takes full responsibility in diminishing the debts associated with the property for a clean title to be ensured.
Home inspection and reconditioning are also taken care of.