What is a Short Sale?
Short-sales are used when the seller owes more than their home is worth in today’s real estate market. Many real estate markets in Illinois and across the United states have been declining in value in the past few years. Some real estate markets have been affected by properties declining values more than others. A large portion of the Illinois real estate market has been affected.
A short-sale is necessary to help the seller that has to sell and can't afford to wait out the declining real estate market. The bank will often discount the loan to market value to release the lien on the home. Sometimes the bank will release the lien but go after a deficiency with the seller. The agent needs to be able to not only understand how to negotiate a short-sale but also to educate the seller on all of the scenarios that can play out during the negotiation on their home.
The deficiency is the difference between what is owed on the mortgage and what the home sales for. Sometimes the bank will want the homeowner to arrange to pay back the difference over a period of years. Often times the bank will offer an affordable payment plan with zero percent interest on the difference. Sometimes the bank will not request the money to be paid back and the seller can move on. The short-sale in and of itself should not hurt the sellers credit. However, missed or late payments can and will effect the sellers credit. It is in the seller’s best interest to try to short-sale the home instead of staying and not being able to make the payments. It is a much better solution for the seller than a foreclosure. The foreclosure will stay on a person’s credit report for up to 7 to 10 years.
Who qualifies for a short-sale? If the seller payments are too high for the seller to be able to pay due to job loss or an ARM that has put the interest rate higher increasing the payment to an amount that is no longer affordable to the seller. Job relocation is also another issue that forces the seller to sale the home because they can't afford two homes but are forced to relocate.
Buying a short-sale is also a very difficult process if the agent does not understand how it works. The short-sale is not the same as buying a REO property. With an REO property the bank has already done the BPO or appraisal on the property and has established a price that they will accept. With a short sale that is not the case. The agent is trying to educate the bank on the market value. They are making a case for the price that is being offered. If the buyers agent does not understand this process is will be very frustrating for the agent and the buyer. The buyer needs to understand that the offer will take longer to get an answer on with the bank. It can be a great deal as long as the buyer understands the process. That is why it is extremely important that you pick an agent that has a lot of experience in this type of real estate market. Buyers must interview agents in this market to know that they are getting someone with a lot of experience with all types of transactions. Agents at Help-U-Sell Select have the training and experience to make the experience as easy and painless as possible in this real estate market.
Please make an appointment today with one of our agents to learn more about this market and how to understand all of your options as a buyer or seller. Although no one can guarantee what this market will do we can do our best to help the client make the most educated decision and decrease the risks involved.
Help-U-Sell Select Realty has both Buyer Agents and Seller Agents that have the extensive knowledge needed to represent the client in this market. Please contact us today for more information on our services.
Call us today and we'll walk you through the steps to qualify for a short sale! 708-342-1212
Tinley Park IL Subdivisions:
Avondale Meadows, Amber Meadows, Ashford Manor, Barrett Brothers, Bremen, Brementown, Bristol Park, Brookside Glen, Caldeonia, Cambridge, Cherry Creek, Cherry Hills, Chestnut Ridge, Clearview, Downtown, Eagle Ridge, Edgewater Walk, Fairfield Glen, Fernway, Hamilton Hills, Highlands, Lakewood Estates, Lancaster Highlands, Millenium Lakes, Oak Village, Odyssey, Old Tinley, Parkside, Parkview, Pheasant Lake, Pottawattomi, Steeple Run, Stonebrooke Villas, Sundale Ridge, Tanbark, The Pines, Timbers Edge, Timbers Estates, Tinley Heights, Tinley Park Place, Tinley Pointe, Tinley Terrace, Townpointe, West Point Meadows, Winston Commons
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