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How Short Sale Buying is Different from Regular Home Buying

 


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The housing market is in disarray. Since the bursting of the real estate bubble in 2007, housing prices have dropped like stones. In fact, many experts expect them to fall even further before the crisis is actually over. In this kind of environment, selling houses is not a good idea. Since home prices are falling as the result of a supply glut, adding one more house to the mix will likely yield no results. The state of the real estate market has resulted in home selling undergoing a major shift, from regular sales to short sales.

Selling a home is normally a simply process of advertising the home and finding someone willing to buy the house. This is the regular process of a home sale. A short sale is when the home is sold for less than the balance owed on the loan consolidated by the property. Mortgage defaults have been accelerating since the bursting of the housing bubble, and lenders have been seizing properties and prosecuting borrowers on a consistent basis since then. The alternative is to perform a short sale. Short sales give the lender some profit from the delinquent borrower, instead of no profit at all from a mortgage proceeding.

The housing market's reaction to a short sale can be varied. Buyers of short sale homes need to be aware that they are very different from buying a home in a regular sale process. There are more legal hassles to overcome, in addition to getting approval from the seller's lender. There is a definite process to buying distressed property that potential buyers can follow if they want to buy such property. Short sold homes usually have problems that need to be dealt with; in other words, they can be fixer-uppers, which is probably why the home is going through a short sale to begin with.

Firstly, it is important to understand that no matter where the buyer lives, from Rocklin California to Bridgeport, Maine, they need the help of an experienced real estate agent or attorney. The primary advantage of a short sale is that the buyer can purchase a home at a greatly reduced price. To do that, they have to navigate the rules and regulations of the lender, which can be very complicated without the help of an attorney or realtor. Actually closing the deal requires some paperwork and time. The thing to understand about short selling is that it makes the lender look better than they would if they foreclosed on the property.

A foreclosure makes the lender look bad. Plus, it is in the lender's best interest to make sure that they get rid of the home as soon as possible. Since the lender owns the home after foreclosure, they have to maintain it, pay taxes on it and insure it. Thus, the lender is now paying money for nothing. Giving the home away in a short sale is much more preferable than this kind of situation. In cities and towns with a relatively medium-sized population, such as Rocklin California, short sales are likely to be bought more slowly due to lack of demand, which could make it easy for buyers to find the best deal.

Rocklin real estate like most of the real estate in California took a huge hit when the housing bubble started bursting in 2006 and 2007. Home prices are still falling in Rocklin, which may mean that more Rocklin homes for sale may show up sooner than later. The key element in all real estate markets, like markets in general, is the balance of supply and demand. In this town in California, with a per capita income of $26,000, falling home prices are good for buyers and terrible for sellers.

Buying a home in a short sale is very different from buying a home in a regular sale, purely because the circumstances of these sales are so different. The buyer needs to carefully appraise the property being sold in this manner in case there are repairs to be made or if the house is not in good condition. As to financing the property, this is critical. The lender may be willing to give the borrower a loan if their credit history is good, since their pertinent information is included in the short sale application paperwork.

Rocklin homes for sale are falling in value, so looking for short sales here might be a good bet. The hit that Rocklin real estate took was not enough to damage the market permanently, but due to the simple fact that the city is located in the state of California, where the housing bubble was worst, Rocklin may take years to recover. Until then, short sales are likely to show up in and around the Rocklin area, which means great opportunities for buyers.

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