Wednesday, September 30, 2015

Shortsale of a Home

A shortsale is a realestate transaction in which the bank agrees to sell a property for in most instances significantly less than the original loan amount.  This is done by the home owner requesting approval from the lender to attempt to sgortsale the property.  Next once the lender has approved the potential shortsale of the property it will be listed for sale and actively marketed.  Prospective buyers can then submit offers for the banks consideration and if they accept an offer the home can then be purchased for the agreed upon prprice and the original.  This type of transaction benefits all parties involved because the original borrower is able to walk away from the outstanding balance of their mortgage, the bank is able to dump the distressed property and the new owner gets the property at a significantly lower price than it would typically sell for.  There are some rules though that the buyers and sellers must abide buy such as what is referred to as an arms length transaction were a family member could purchase the property on behalf of the original borrower to attempt to get the title to the property for less than they originally purchased it for and this type of transaction is illegal and if caught the lender could reattach the original loan amount.  Shortsales are a great way to get out of a loan you cannot afford to repay and for investors pickup great properties at deeply discounted prices.