The Profitability of Real Estate Short Sales

For a homeowner who owes more on their property than the home can get at an auction or a traditional  sale, a real estate short sale can be an excellent option for them. Any type of financial difficulty from divorce to illness or job loss can put a person in jeopardy of losing their home.


The question often becomes whether or to spend dwindling savings left on food rather than bills. When this happens, it is possible for a mortgage payment to become late. Eventually, as the prospects of finding another job or source of income dwindles, that mortgage payment can fall so far behind that the lender has no choice but to foreclose.

A foreclosure for a homeowner can be devastating emotionally and financially. It does serious damage to one's credit. For some homeowners, they can file bankruptcy as a means to getting caught up on any arrears on the mortgage. For some, there is no option but to let the home get taken back by the lender.


This does not have to be. If more owners understood the way short sales in real estate work, they could walk away from the home without owing anything more on the mortgage. Their credit would take a hit, but it would not be as serious as a foreclosure. For real estate buyers or investors, short sales are a great opportunity to get a bargain property which can eventually be resold for a profit if not rented out.


A short sale starts with a written agreement where a bank says it will take much less than what is owed on the mortgage through a sale. This type of sale happens in much the same way as a conventional sale. The property gets listed, buyers get to view the house and make offers.


They present cash or proof of qualifying for a mortgage as a down payment, and the closing happens. The seller gets rid of the home and avoids foreclosure while the buyer gets to purchase a home for a discounted sum.


For the homeowner, it is important to find a qualified, experienced short sale agent. While the process is similar to conventional sales, it has enough differences and a lot of paperwork that can only be handled properly by a person with experience. There will be negotiations between the seller, prospective buyers, and the bank.


A prospective buyer can get the property for much less than the fair market value of the home. This makes buying short sales profitable. The buyer can often get a property that is in relatively good condition, too. This is because the owner of properties that go on the market are usually good about taking care of the property that they live in.


Short sales can benefit both the sellers and the buyers of these properties. If you are going through difficulties paying your mortgage, consult with your bank about a short sale. If you are an investor, consider buying short sale real estate.