Short sale buyers are those people who take advantage of a home being sold through a short sale for less than it might be worth. This occurs because the current owner of the home has fallen behind on his mortgage payments and offers the mortgage lender the profits of the sale to pay off most of his debt. It is crucial for short sale buyers to gather as much information as possible concerning the home's value, the equity of the current owner, and the situation regarding the mortgage loan. Buyers should also do everything possible to convince the lender that selling the house for a discount will be more financially beneficial than foreclosing on it.
As more homeowners struggle to make their mortgage payments to lenders, short sales have become more prevalent. Although these situations can be difficult for homeowners, short sales can benefit all parties involved. The seller can get out of his mortgage obligation at much less damage to his credit standing than with a foreclosure, the buyer gets a home at a discount price, and the lender avoids costly foreclosure costs. But short sale buyers must be aware of the best ways to navigate what can be a tricky process.
The first step for short sale buyers is identifying the homes that might be available for a short sale. In general, lenders, who have the ultimate authority in the sale process, won't agree to a short sale unless the homeowner is way behind on payments and doesn't have much, if any, equity in the home. A buyer's agent with experience in short sales can point potential buyers in the direction of houses that might fit the blueprint for a potential short sale.
Once a house is picked out, short sale buyers must understand that they have to deal with both buyers and lenders. They can use their knowledge of short sales to help convince the sellers about the benefits they would receive from the process, including, in the United States, tax exemptions on the relief of debt afforded by a short sale. In addition, buyers must beware that the price being quoted by the sellers must ultimately be approved by the lender.
With regards to the lenders, short sale buyers must be able to convince them that the property will be more profitable to them if it sold rather than foreclosed. Ironically, buyers should actually try to convince lenders that the house is in poor condition. Lenders might then deem that the home might not be easily sold if they gained possession of it through foreclosure.
