Virga Realty, Inc.- Short Sale Realtor
At Virga Realty, it's our job to know the short sale market and current market value to price and sell a foreclosed parcel of real estate. We at Virga Realty, Inc. secure the best conditions so that you receive the highest price achievable for a foreclosed property while having the buyer in mind. Virga Realty wants you to get the utmost value from your property, within the time frame you or the bank need. A short sale is a real estate sale where the sale profits don't quite meet the balance that the loan on the property is still owed. It often happens because a borrower is not able to finish paying the mortgage on the mortgaged property, but the lender makes the decision that putting the property out at a small loss is much better than trying to get money from the borrower. All of the parties have consented to the process of a short sale because it makes them able to get away from a foreclosure, and that involves large bank fees and negative credit report scores for the borrowers. The agreement does not mean it will allow the borrower to be released from his/her obligation to pay the balance that is left of the loan, which is called a deficiency.
In a short sale, the mortgage lender and/or bank agrees to bring down a loan balance because of a financial or economical hardship on the borrower's side. The home owner will put out the property for somewhat less than the current balance, and turns over the proceeds of the sale to the lender. Nobody is doing anyone a favor, because a short sale is just the most economical solution to a problem. Banks will carry a financial loss that is less than foreclosure or continuing lack of payment would bring. Borrowers are now able to lessen damages to their credit history, and partially have control over their debt. A short sale is typically faster and a lot less expensive than a foreclosure is. It doesn't remove the remaining balance except if settlement is clearly shown on the acceptance of offer.
Lenders will often use loss mitigation departments to evaluate could-be short sale transactions. A bank will almost always determine the scale of equity (or lack thereof), by determining the could-be selling price from an appraisal or Broker Price Opinion.
Short sales are much more separate from foreclosures because a foreclosure is by force from a lender, where instead both borrower and lender consent to a short sale. This consent can change at any time and negotiations could be a continuing process between the borrower and lender even during the time the short sale is out somewhere on the market. The borrower may decide to stay and then refinance their house, or become too obstinate and force a foreclosure. The bank may renege as well if they decide to stay with the borrower, or if they do not approve of the sale price. Any short sale contract includes a contingency where the bank must approve the sale.
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