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RSS FeedMany times, home owners will find themselves in the terrible position of facing foreclosure. Foreclosure is a terrible process to go through and it can have a severe impact on your credit score. While foreclosure is bad for the home owner, it is not much better on the bank holding the mortgage. The bank ends up stuck with the property and often loses money in order to sell the home.
Knowing how long the foreclosure process can take and that they will end up having to sell the home anyway, many banks now allow homeowners to sell the home for less than the amount owed on the mortgage. This process is known as a short sale where the bank and home owner both agree to sell the home for less than its current payoff in an effort to protect both of their assets.
Short selling a home in San Diego is a little different than in other parts of the nation. For one, there is an increasing demand for homes in San Diego due to the low amount of inventory and many people are looking to get a great deal. Many home buyers prefer to buy a foreclosed home, but end up in a multiple offer situation, which can be very disheartening. A short sale can be a great alternative as many shun away from the process of dealing with short sales. If you find a property you like and it is a short sale, chances are you can get a great deal and not have to deal with the crowds that surround foreclosures.
Past
In the past, when the housing market was prospering, banks knew they would be able to sell the home after a foreclosure, or even during the foreclosure process, with a minimal loss. In most cases, the balance amount the bank had invested in the property (the remaining balance on the loan) was less than the actual value of the home because so many people were looking for new homes.
Present
Currently, the demand for pricier homes is on the decline. With the instability in the US economy, many are reluctant to make large purchases. People are looking for deals and banks understand this. For this reason, many banks will allow home owners to offer their homes through a short sale in order to avoid the costly expense of a foreclosure. Home owners benefit because the mortgage will be paid off and the banks benefit because they aren’t incurring all of the legal expenses and time involved with the process of foreclosure.
Future
The future of short sales is rather uncertain. No one knows exactly where the housing market is headed. While many experts feel it is improving only time will tell how soon our economy will flourish again. Because banks have realized they lose less money through a short sale than they would through a foreclosure, it seems probable that banks will continue offering home owners this option and the government will continue to incentivize banks, buyers and sellers.
Short Selling a Home in San Diego
Because San Diego is an area which sees an influx of new residents on a regular basis, it is the perfect market for those looking to sell a home that is priced competitively. With the current economic climate many people are looking for the best deal possible, so a short sale can be a great option. Home owners who are facing the threat of foreclosure should look into short selling their homes as generally it is the least damaging outcome to their economic future.
If you are trying to short sell your home in San Diego, you need to advertise it well. The more people you have coming to look at your property, the more likely you are to sell it quickly. You may even want to enlist the aid of a real estate agent if you need to move your property quickly. Before listing your home you may want to speak with your bank to find out the lowest amount the bank is willing to accept for your home.
For any offer you get, weigh your options carefully. If the offer is well below the minimum amount allowed by your bank, odds are it will end up taking months to hear back from the bank for approval or declination. If the offer is close to the mark set by the bank, counteroffer to get the amount where it needs to be. Banks are quite firm in the amount they are willing to accept and there is no sense in tying up your property with an offer the bank is unlikely to approve.
While you would expect your bank to be helpful in the process of a short sale, in most cases they are not. You may need to find a specific person you can contact about any offers you receive. Always try to work closely with the bank as you are both benefiting from a short sale; and you may find it necessary to remind the bank of this fact.
We always recommend you contact both a local real estate attorney and tax attorney to give you additional information that is pertinent to your unique situation.
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Tags: Banks, buy, Cardiff, Carlsbad, Del Mar, Encinitas, Home, House, Market, Oceanside, Real Estate, San Diego, sell, Short Sale, Solana Beach
Posted In Blog, Buyers, San Diego, Sellers
This entry was posted on Thursday, January 28th, 2010 at 10:34 pm and is filed under Blog, Buyers, San Diego, Sellers. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.