Louisville Short Sales
If you’re looking for a bargain price on your next home purchase, you might consider exploring Louisville short sales. But be sure to come armed with plenty of patience: the short sale process is far from an easy one.
The Rise of Short Sales
Short sales have become an important part of the housing market as a growing number of homeowners turn to them to avoid losing their homes to foreclosure.
In short sales, mortgage lenders allow homeowners to sell their residences for less than what they owe on their mortgage loans. This means that lenders agree to take a loss in a short sale.
There’s a reason why lenders do this: a short sale allows homeowners to price their residences at a lower asking price. This, in turn, increases the number of buyers able to purchase their homes.
Homeowners often turn to short sales after they begin struggling to make their mortgage payments, whether a breadwinner has lost a job or someone in the household has suffered a costly illness. Rather then begin missing payments and move closer to the foreclosure process, these struggling homeowners rely on short sales as a way to sell their residences in a shorter amount of time, hopefully before their financial situations grow dire enough to cause them to miss payments.
Lenders allow short sales – and agree to take a loss on the home sale – because a short sale often costs them less time and money than does taking over a home through the foreclosure process. Most banks and lenders do not want to get into the home-selling business. They don’t enjoy taking over homes and trying to sell them, especially in a housing market that is still struggling.
This presents an opportunity for buyers. Short sales are often priced below market value. Buyers working with knowledgeable real estate agents might be able to find a home priced at a bargain level, even if it sits in a desirable location.
Buyers, though, need to be warned: buying a short sale does require patience. And sometimes short sales fall apart late in the buying process.
When buyers make an offer in a short sale, sellers must first bring these offers to their mortgage lenders. Their lenders can either approve the offer or reject it. This is where the frustration for buyers comes in; even if sellers approve an offer, in a short sale, the bank must give its OK, too. And more than a few short sales have broken up because banks reject offers that everyone else in the real estate transaction likes.
If you are interested in purchasing a house through the short sale process, make sure to work with a real estate agent who knows your market. The key to success in short sales is to nab a home at a price that truly is a bargain. Buyers who offer too much gain none of the advantages inherent in a short sale while still suffering through all of the challenges.