CommonWealth Real Estate Your Way, Brodheadsville
Pocono and Lehigh Valley Real Estate Blog

What is a short sale?

June 17, 2009 by · Leave a Comment 

Q:  “I’ve been hearing lots of buzz about “short sales,” -  what are those?”

A: When an individual is behind on their mortgage payments and the value of their home is less than what is owed, it is often a good idea to pursue a “short sale” situation rather than hold off until a foreclosure is imminent. To do this, communications begin with the lender. The objective is to see if the lender may consider taking less than is owed on the home so the individual can get out of the bad situation without still owing additional funds on the mortgage after the sale. Next, a REALTOR lists the home below the mortgage pay off, with the contingent that the lender approves a “short sale.” This can take months for several reasons. First, a buyer must be found that is willing to wait for lender approval and second, there are so many foreclosures and short sales in the system that the lenders are playing “catch up.”

The good news is that for an individual sitting on some cash, a money market, a cd,  or someone who has been saving for a home, investing in a “short sale” property is an excellent investment and an excellent opportunity. Many homes are below market value and interest rates are at all time lows. And, there are a whole host of additional incentives for the first-time homebuyer.

I recommend finding a REALTOR buyer agent to help you find a bargain.

I can tell you about some Pocono real estate where new construction homes were sold with financing that should not have gone through for some borrowers. In some cases, homes are being sold for six figures less than their actual value. These are new homes in good condition. What a great opportunity for a buyer who waited and can snatch up one of these short sale homes for a “steal.”

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