Brooklyn Short Sales – What is a Short Sale?
“What exactly is a short sale?” you ask. A short sale is when a lender willingly forgives part of a debt owed on a house. Or in other words, the bank is shorted some of the money they are owed.
For example, a home owner is over 90 days late on their mortgage payments with no hope of catching up. Eventually they will be foreclosed on. Their total mortgage amount and arrears is $500,000. The bank agrees to let a buyer purchase the property for $475,000 causing the bank to lose $25,000.
There are many banks and other lending institutions out there, and each has its own short sale procedure and requirements. The one thing they all have in common is that the short sale processes takes a very long time.
Why would a bank agree to this? If the bank concludes that foreclosing on the property, maintaining it while they try to sell it, and dealing with the cost of selling it (transfer taxes, Realtor fees and so on) is going to cost more money then the amount they are being asked to forgive, the bank may choose to cut its loses and agree to a short sale.
Buying a short sale property is not an easy task. Here is a great article from the New York Daily News Website that explains the process in detail.
Are short sales available in Brooklyn? Yes they are. To find out more click here or give me a call at 917-544-2662.
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