Creative Real Estate Investing

Foreclosure is a big problem in the real estate market nowadays because lots of people have lost their jobs. One way to get out of foreclosure is to do a short sale. When a homeowner has no way of paying his or her mortgage payments, a real estate short sale may be a viable solution for the homeowner. You do not have to wait until you are late on your mortgage payments to begin the short sale process. Find out what is a short sale and consult a Realtor early about the possibility of doing a short sale when you think that you might not be able to keep up with house payments in the near future.

Understanding What a Short Sale is

A short sale is a real estate sale in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to discount a balance of a loan because of an economic or financial hardship on the part of the mortgagor. This negotiation is done through communication with a bank’s loss mitigation department.

How to Stop Foreclosure

A short sale typically is executed to prevent a home foreclosure. Often a bank will allow a short sale if they feel that it will result in a smaller financial loss than foreclosing as there are carrying costs associated with a foreclosure. A short sale is often faster and more cost effective than a foreclosure. In short, a short sale is just a process of negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining mortgage balance unless settlement is clearly indicated on the acceptance of offer.

Learning about Short Sale

There are lots of books written about short sale. Some books are for homeowners in foreclosure. These books explain to them what a short sale is and how it can help them save their properties from foreclosure. There are also books aimed at real estate investors trying to take advantage of the foreclosure market. Foreclosed homes are usually cheap so new home buyers and new real estate investors can buy them fairly easily. Examples of books on short sale are The Art of the Short Sale, Short sales: An Ethical Approach, Doctor Foreclosure: The Secret to a Successful Short Sale, and Short Sale: A Practical Approach.

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