What is a Short Sale?

A short sale is a scenario in which a homeowner has fallen behind on mortgage payments, and the bank that has extended the mortgage is motivated to recoup at least some of the money borrowed since their client isn’t paying. The house may be sold for much less than the lien held against it, but the bank will get as much as possible instead of losing out on payments for months and months.

A homebuyer that buys a short sale gets a great deal, usually paying a fraction of the value of the home. Short sale is an alternative to foreclosure, and it costs less in fees for both the borrower and the bank. It will end up in a negative credit rating for the borrower, but can sometimes definitely be a preferable option to foreclosure or bankruptcy. On a credit report, a short sale will likely be reflected the same way a foreclosure would, which will make it hard for that borrower to get a mortgage again. However, the borrower can request a letter from the previous creditor, stating that the debt was settled in short form instead of foreclosure. This letter, along with credit ratings from all three credit bureaus, will help the borrow to buy another home in the future.

They made up a major part of the real estate market, in St. George and elsewhere from the time of the national economic crisis in 2008 up until 2013. They are still something to watch for in the market for buyers today. If you are interested investing in St. George real estate to flip, rent, or make your own home, a short option can be a great opportunity for you.

For more information, contact a representative from Holiday Resort Realty.

What is a Short Sale?

Short Sale

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