Yesterday, I was having a phone conversation with my daughter when she asked an eye-opening question. I mentioned working on short sales and her response was, “What exactly is a short sale? I keep hearing that term but I have no idea what it is.” I am aWichita Real Estate Agent and my own daughter had no idea what a short sale is. If my daughter is wondering, how many other people are wondering the same thing?
I explained to her that a short sale takes place when you really need to sell your home but, because of the downturn in the market, you can’t sell it for what you owe on it much less pay any costs associated with selling. In a short sale, you put the home on the market at the market value and when you receive a contract, the lender accepts the contract as payment for the loan and the costs associated with selling.
My daughter’s instant response was, “Why would a lender do that?!!” I don’t think she could quite see a lender eating the loss because they wanted to help her out and, of course, that is not the reason. I explained that, if the house had to go into foreclosure, it would cost the lender a lot of money and they usually get a property in shabby condition. Short sale is a simple business decision for the lender. It saves the lender money. The nice thing is that it can also save the homeowner a lot of distress, devastating damage to their credit and even the opportunity to own another home in the near future. It can be a win for everybody.
Read the rest at our Wichita short sale agents website.