Short Sales in 2024? Wondering about the resurgence of short sales in today's market? In this video, we dive into what exactly a short sale entails and why we're seeing them reappear. A short sale
Short Sales in 2024?
Dated: February 9 2024
Are Short Sales returning? A Short Sale is a term that you may not have heard during the last 10+ years but under current market conditions we are starting to see a few of them come on the market again. What exactly is a Short Sale? A Short Sale occurs when a borrower faces a financial hardship and needs to sell their home for less than the amount owed on the mortgage. This usually coincides with a downward change in home values. For homeowners who are struggling to meet mortgage payments, a Short Sale can be an opportunity to avoid a foreclosure and minimize the impact on their credit score and possibly avoid tax consequences.
To qualify for a short sale, a borrower (homeowner) must have a documentable hardship such as a job loss or relocation, a reduction in income, a divorce or death of a co-borrower, or an adjustable mortgage that re-sets to a payment that is no longer affordable. Because the lender is accepting less than what the borrower owes, they must approve the Short Sale. The advantage to a lender is that a Short Sale minimizes their losses by avoiding the extra expense of foreclosure.
Short Sales are more challenging for both buyers and sellers since the bank is also involved in the decision making process. In fact, the lender can reject offers that the homeowner might accept and even lengthen the timeline. It's really important to have a real estate agent who has experience working with banks and can anticipate any pitfalls, risks, or additional hoops you may need to go through.
If you or someone you know has questions, our team has extensive experience with Short Sales and Short Sale alternatives. We can help you navigate through the intricate process of exploring all your options and determining the best path to move forward.
When considering a Short Sale or Short Sale alternatives, we recommend that you consult with local tax and/or legal professionals.
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