A short sale Houston happens when the lender forgives a portion of the loan amount or lowers the amount and allows the property to be sold at market value. This is a relief for homeowners who have been worrying about foreclosure because they can now dispose of the property in a normal regular real estate transaction. The plummeting real estate values have been instrumental in bringing a lot of short sale Houston because many homeowners began to own more mortgage than the market value of their homes. This situation is also tagged as being upside down in mortgage.
Short sale usually happens to the homeowners who suffers serious financial hardship and cannot make payments on time. It could be a job loss, serious illness or a situation where they had to suffer serious financial problems. If the situation goes like this for long, and there is no respite in sight, then the homeowner will apply for short sale. The situation gets aggravated when the homeowner defaults of payments for months, and dues the pile up, including attorney fees.
Any homeowner going through situations like this can request the lender to agree for short sale. In your credit report, it is the short sale that would reflect better than a foreclosure as it shows that you are being caring about the lender and is trying hard to diminish his losses. You can buy a home two years after the short sale if you want to buy another house in the future.
In short sale Houston, it is important to calculate the Broker’s Price Opinion on the property. This is to gauge the market value of the property. In some cases, two or more lenders are invited to give their opinion. If the values provided by the brokers match, then the lender will approve the short sale.
However, the decision for short sale will fall squarely in the hands of the lender. If the lender feels that he is likely to earn more money by letting the property go into foreclosure, then he will wait for that to happen. This way he will be able to wipe out second mortgage, mechanical liens, home equity loans and so on.
The reason why most lenders hesitate for a short sale is that the actual price of the property and the listing price of the property are both different. The lender wants to sell the property for the highest market value possible. If the listing price of the property is the same as the actual price, then it is important to get the approval of the lender.
However, there is something that you may not like about. A lender might not give approval for the short sale immediately. He might take his own sweet time; there are short sales that have taken a year to compete. And even so there lenders who do not agree for to share closing costs, because they are trying recoup their losses.
Hence, there are many things to keep in mind while going for a short sale. Consider them before agreeing for a short sale, or even purchasing one.