Saturday, June 14, 2008

A short sale may be the way to go to acquire property

By Bobbi Dempsey

There are very few active buyers in the real estate market these days — but every one of them seems to be looking to buy a foreclosure or a short sale.

Foreclosure is a fairly well understood process, but as "short sale" signs sprout like weeds, you may wonder what it's all about.

When a lender agrees to accept a mortgage payoff amount less than what is owed in order to facilitate a sale of the property by a financially distressed owner, it's called a short sale. The lender forgives the remaining balance of the loan.

Can it work for you?

Buying a home in a short sale can be a hassle, so why should you consider it? It boils down to the bottom line. You'll get the property for a substantial discount. Because the lender is eager to continue to get paid back the money it loaned out, it may also offer favorable financing terms.

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