So, what is a short sale anyway?
A short sale is simple - but the process is not. Let me explain. A short sale, short and sweet, is when a mortgage lender agrees to take a payoff LESS than what is owed on any particular property. So, if Roger and Sue owe $180,000 on their house and the bank agrees to take market value at $150,000 - they will be completing a short sale. Typically, the bank will only agree to do this if the seller can prove some type of hardship (including but not limited to: change in salary, unemployment, illness, disability, and extreme relocation).
In our current real estate market, short sales have become a more frequent occurrence because the need has sky-rocketed. High unemployment numbers, combined with a fallen housing market, have created a hostile environment for households that are upside down on their homes and even behind on payments. Many of these families think their only option is foreclosure-- giving up on the american dream. Fortunately, the banks have heard their cries over the past few years and instated policies, procedures and even entire departments to take care of their customers' short sale needs.
You see, the problem for the bank with completing a foreclosure lies in legal fees, taxes, advertising, evicting tenants, cleaning, maintaining, insuring, and marketing/selling the property at hand. All in all, they will likely spend MORE money to foreclose and will likely get less for the house when it does sell because it may sit empty longer and may even be subject to vandalism and theft. In a short sale, the seller typically remains in the home, keeping it up, cleaning it, making small repairs, and keeping vandals away.
Whether the bank sells a foreclosure or a short sale, they can only sell for current market value - so they actually benefit from selling the property as a short sale before the house gets to "the county steps".
The benefit to a seller who is facing a foreclosure is that a short sale allows them to have a conversation with the bank about their deficiency. When a homeowner forecloses on a property, the bank is allowed what's called a "deficiency judgement" for which they have a 7 year statute of limitations. This means that if they chose to come after a homeowner for any money lost on the foreclosure, they have 7 years to do so. This is the most clear and definable benefit of the short sale process. Call me today for answers to your short sale questions.
Brittany Purcell
770-713-4278
Athens, GA Real Estate
Associate Broker | Certified Short Sale Specialist
Keller Williams Realty Greater Athens
