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What is a short sale house and what does it mean for you as a homeowner or a house buyer in Lake Grove, NY? This is a complicated process and there is much you need to know, but let’s start by establishing what exactly a short sale house is.
What is a Short Sale House?
A short sale is when a financially struggling homeowner sells their house for less than what is owed on their mortgage or loan. When this happens, the house is sold to a third party and all the proceeds from the sale go to the bank or the lender. In some cases, the lender will forgive the difference between the profits from the sale and what the seller owes on the house, in others instances they will negotiate for all or part of the difference to be paid off. A short sale will hurt the credit scores of the seller, but it is less financially damaging than a foreclosure. A foreclosure is when the bank seizes the house of a person who cannot make payments on their loan; this is usually a last resort on the part of the lender when a homeowner cannot pay the mortgage on their house.
What Does a Homeowner Need to Do?
If you are a homeowner in Lake Grove, NY who is considering a short sale to alleviate their financial situation you will need to submit an application to your bank describing your financial circumstances. Any short sale will need to be approved by the lender beforehand. It is possible that the lender will want to know why the seller wants to sell their home for a lower price. Banks will not want to forgive the debt of someone who has simply been careless with money; they are much more likely to permit a short sale for someone who is in financial distress because of unforeseen circumstances beyond their control, such as a medical emergency. It will not hurt to ask a financial advisor if a short sale is a good option for you and discuss filling out the paperwork for a short sale on your Suffolk home.
What Does a Short Sale Mean for a Buyer?
Are you a house buyer who is considering purchasing a short sale house in Lake Grove, NY? Buying a short sale house might mean you get the property at a reduced price, but there are several things you should be aware of to be sure you are making a good investment. The seller cannot list their house as a short sale without the permission of their bank or lender, so you should make sure they have been approved ahead of time. Furthermore, the lender also gets the final say on selling the house. Getting the approval of the lender for the sale can be a lengthy process; you are subject to their timeline, and they will respond to you when they want to. Furthermore, the payment is also subject to the lender’s preferences. Lenders want to get as much money back from their loan as possible, so they may prefer that the purchase is made in cash or that the buyer makes a large down payment. They may choose to sell the house to someone in Suffolk who can make such payments, even if you contacted them first.
You should also consider what kind of investment the short sale is as a property in Suffolk. The homeowner is most likely listing the house as a short sale because of financial distress, which means they may not have the money to pay for repairs on the house before the sale or for upkeep in general. This means you will have to accept the house as is and the property will be worth less. If you have the stamina and resources to renovate the house yourself this will not be a problem for you. You might also consider having the house appraised before buying it; you can ask the seller and/or the lender if they would allow this. However, if you are too focused on a short sale house you might lose out on another, better home in Lake Grove, NY. Make sure you are still looking over listing sites and seeing what else is out there while inquiring about a short sale.
Still Have Questions?
Short sales can be complex and differ in many ways from a typical house sale. If you are a house buyer or seller in Lake Grove, NY, and there is still more you wish to know about short sales, you can always reach out to a professional for help. The staff at V Buys Houses are happy to answer your questions and can be reached at 631-831-8714.