What is a short sale?

Short sale is a type of real estate transaction in which the property is sold for the amount lower than the bank. As the term "short sales" indicates, the bank comes "short", but it may decide that allowing to sell the property is a better solution than exclusion on it and soluting sales in this way. Short sales are usually used by people who owe more in their homes than home, or individuals who have difficulty performing mortgage payments. In some cases, this may be done after the bank has begun to issue a notice that the debtor is on the loan by default, and in other cases the debtor can acknowledge that the problem is approaching and deciding to actively contact the bank. In principle, the debtor must apply for the bank's permission for the sale of real estate for less than the debtor's debtor, with the debtor, and then the sales amount to the bank.

Banks usually want to restore the full amount of loan if it isthat possible. However, they also want to avoid exclusion on real estate, as the closure of the market can be time -consuming and expensive and the bank does not want to own the property and must sell it. For this reason, if the borrower can submit a convincing case, the bank may indicate that it will consider short sales.

In short sale, when the property is listed with a real estate agent, the sale is marked as a "conditional agreement on short sales". Each offer of offer to the seller must also be presented to the bank and the bank has the right to refuse offers. Once the bank accepts the offer, the property can be sold as it would be normally, and if the sale is completed, the bank will receive the proceeds.

For debtors, browsing short Sale is definitely better than being confiscated. Short sales will still negatively affect the credit report, but not so seriously, and allow the debtor to get from under the debt. The debtors should be aware that the debt is not always forgiven at sale, and it pays off to workVník reviewed the conditions of a short sale contract to determine whether the bank would forgive the debt. If the debt is forgiven, it is also considered to be a taxable income, which means that the debtor will have to declare and pay taxes tax time.

people who are interested in buying real estate can sometimes get a lot with this type of transaction. However, the process is slightly more involved and is subject to the bank's approval, which can be stressful. In addition, potential buyers should always look at the prices of comparable properties in this area, especially if there is a decrease in real estate values, because in fact it may be cheaper to buy on the open thnabid market for short sales or closed home.