Some Florida homeowners unfortunately fall behind on their mortgage payments due to no fault of their own. Luckily, there is at least a short period where the homeowner still has possession of the home and can stop the foreclosure through a short sell. A short sale, is when the home sells for less than what is owed on the mortgage, usually to avoid foreclosure.
Both buyers and sellers can benefit in different ways from a short sale. For a buyer, they get the home for less than market value. In a booming housing market, this can mean making a nice profit from selling the property. But, even in a down market, the buyer still can turn a profit with some property upgrades.
For the seller, they avoid foreclosure and the resulting damage to their credit. This is because the bank agreed to accept less than what the seller owed, and the seller can walk away from the home without that financial obligation.
However, short sales can have tax implications. And, the closing process can be much slower than in a traditional home sale because there are usually more steps, and the loan holder must sign off and approve the short sale. Patience is key for short sale real estate transactions.
While short sales may not be right for every buyer, they could be the perfect scenario for some prospective homebuyers. A short sale could get one their dream home for thousands cheaper than market value. But, there are many pros and cons to weigh about a short sale property that every potential homebuyer should consider, and consulting an attorney can be helpful.
Source: RealEstate.FindLaw.com, “Pre-Foreclosure Sale,” accessed on Dec. 25, 2017