What is a Real Estate Short Sale?

What is a ‘Real Estate Short Sale’
A real estate short sale is any sale of real estate that generates proceeds that are less than the amount owed on the property. A real estate short sale occurs when the lender and borrower decide that selling the property and absorbing a moderate loss is preferable to having the borrower default on the loan. It is therefore an alternative to foreclosure.
BREAKING DOWN ‘Real Estate Short Sale’
Real estate short sales can be done only by mutual consent of borrower and lender. Both parties can benefit greatly from this type of transaction. Borrowers can avoid having a foreclosure appear on their credit report, while lenders can avoid substantial fees associated with foreclosure.
What is ‘Foreclosure – FCL’
A situation in which a homeowner is unable to make full principal and interest payments on his/her mortgage , which allows the lender to seize the property, evict the homeowner and sell the home, as stipulated in the mortgage contract. One month after the homeowner misses a mortgage payment, he/she is in default and will be notified by the lender. Three to six months after the homeowner misses a mortgage payment , assuming the mortgage is still delinquent and the homeowner has not made up the missed payments within a specified grace period, the lender will begin to foreclose. The farther behind the borrower falls, the more difficult it becomes to catch up, since lenders add fees for payments that are 10 to 15 days late.

 

Comments are closed.