Sunday, September 27, 2009
Short Sales in the Real Estate Market
By Rico K. Setyo
Generally, when people sell, they sell for some type of profit, whether it is big or small. However, the real estate market has not been looking good for a lot of homeowners lately. During these tough economic times, many people have been forced to put their homes on sale. Even though their real estate is for sale, it does not necessarily mean that someone will buy it once it hits the market. Because of the buyer’s unwillingness to purchase homes for their listing price, many homeowners have desperately agreed to short sale their homes. Short sale is “a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold” (Lara Jr.) No one really wants to sell their homes for less than what it’s worth but the recession has pushed many families to such decisions.
Short selling homes have been quite common in today’s market but it is debatable whether it is the best choice for homeowners. One issue that always comes up in short selling real estate is the duration of the process. Many buyers are not willing to wait out the short sale approval duration because sometimes it gives the buyer a sense of uncertainty. The duration of approval from the lenders of the mortgage is undeterminable because of the fact that it is all up to the lender. Another issue is the Short Sale Debt, which is the idea that getting debt relieved may not be as easy as it seems. Even though many lenders verbally say that you are approved of the short sale, an article by Benny Kass mentions that “no lender has ever expressly released the borrower from liability on the note in writing”. This can be a problem because to legally prove anything in the United States it requires proper documentation. It is advisable that short sales should not be your first alternative, it should be one of your last choices.