If you are in a foreclosure situation you have more than likely you have heard the word “short sale”. So what exactly is a short sale? A short sale is when a lender agrees to accept less than the debt owed on your property. This is nothing new in the world of real estate. Lenders have been doing short sales for years. Since the economy tanked this practice become increasingly more popular. There is a lot of confusion when it comes to short sales and foreclosures in St Louis so we decided to bust some of the myths for you.
1. Lenders do not want to participate in a short sale. A Lender would rather do a short sale than let the home go into foreclosure. In order for a bank to pursue a short sale it takes a long time and is a huge expense. A short sale will ultimately save them time and more importantly money!
2. Short Sales are not that common. In this present economy short sales are responsible for 30-40% of all home sales. A current study shows that in 2013 there will be more short sales processed than any other year.
3. Short Sales will cost me money out of my pocket. A short sale should not cost you a dime. In fact you could get up to $3,000 in moving expenses if a short sale is approved. A realtor makes there money on the commission on the sale of the property. So there is no need to come up with any money out of your pocket.
4. My house is up for auction so I can’t do a short sale. Depending on the lender, most of them require a minimum of 15 days before the auction in order to get the auction stopped in order to pursue a short sale. Even though 15 days is cutting it close there is still a chance.
5. I have been denied for a loan modification so I know I will be denied a short sale. Loan mods and short sales are handled by two totally different departments. The approval process is totally different for each department. If you have been denied for a loan mod you can still have a better chance of getting approved for a short sale.