C21 Scott Realty

What's a House for Short Sale?

How is this favourable to you?

In a simple term a house for short sale is listed for sale at an amount that is lower than its remaining loan balance.

A house for short sale offers a triple benefit:

- The present owner avoids plenty of the damaging effects of foreclosure, including lasting impact to their credit reports, and future issues on government funded loan programs.

- The lender avoids the unnecessary costs and substantial legwork concerned in foreclosing and adequately getting rid of a foreclosed home.

- The home buyer benefits financially, getting a quality home at a lowered price. This is a unique opportunity in the prevailing real-estate market.

Are you a home buyer?

Substantial savings might be in store with a house for short sale, as the bank is willing to allow the home to be sold at less than its current loan balance. To explain, buy your perfect home for less!

Are you a borrower?

A house for short sale will impact a homeowner's credit much less than a foreclosed home. Repos stay on credit record permanently and can affect borrower credit as long as 10 years or longer. Also, the foreclosure must be disclosed when submitting an application for government funds like Fannie Mae, mortgage or investment mortgages for at least 7 years!

Once the sale is over, delinquent payments will show on your credit score. But a home for short sale often shows as 'paid as agreed ', 'paid as negotiated ', or 'settled'. Therefore , a short sale is an ideal option if loan modification is not available. The impact to your credit will be a lot less serious.

What about banks?

The bank is often happy to unload the house for short sale because this lets them minimise expenses involved with foreclosure.

It really does come down to the bottom line!