April 23, 2024


Mad about real estate

A Guide to Foreclosures, Short Sale and Pre foreclosures

The people who are paying for their mortgage loan receive the strongest blow when a house slid into the stage of foreclosures. As the property owner stops paying for the outstanding amount, the bank takes over the ownership of the house and sells it in the market to obtain the amount that the owner owes to them.

The probable list of debtors who have stopped making any further payments for their homes or is taking their own sweet time to clear off the dues, holds a strong possibility to go into the record book of foreclosures. This can jerk them a bit and make them aware of the present drastic scenario that is closing in.

The bank have no other options left other than selling the mortgage property to retrieve the due from the debtor and in this process even the property gets a meager value compared to other housing properties, they would still sell it for the money they get. The lender would not really mind incurring the loss in terms of its value as it is much profitable than getting nothing from the part of the borrower.

Thus, at the time of a pre foreclosure, it can be extremely profitable for the property seekers who are looking for decent properties at reasonable rates. This sort of process is exactly what they would be looking for which would end their search for homes. In case the property includes some equity, can prove to be a wonderful buy and lay off a win win situation for the purchaser, the property owner who can get rid of the credit that is outstanding as well as the lender.

The bank may involve a realtor who would negotiate on behalf of the bank with the property buyer and try to sell the house in the current market rate which can cover a lot of loss incurred by the bank. A realtor is an important factor who stimulates the process of short sale where the worth of the property is greater than the amount owed by the property owner to the bank. In these situations, usually the realtor is asked to sell the property at a lower rate than its actual value.

The process of short sale benefits the seller by relieving the person from the mortgage payment. It drives away the headache of the lenders to sell the house and also get some repayment of the loss that it had incurred. The most benefited party among the three is the buyer who got this great opportunity to buy a good property at such a reasonable price.

There is no fixed assurance on the value of the property in the present scenario of the property market. The worth completely depends on the needs of the prospective buyers which may vary from time to time. It becomes very difficult to assess such situation when processes like the short sale come very handy to both the sellers as well as the buyers.