I am often asked what a “short sale” is and what are the effects with Virginia Beach, Chesapeake, Norfolk, Suffolk, or Hampton Roads Real Estate.
Wikipedia defines real estate short sale as:
Short sales Virginia Beach
“A short sale within Virginia Beach and surrounding areas occurs when the proceeds of a real estate sale fall short of the balance owed on the property.[1] In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor.
More simple:
“A real estate short sale in Virginia Beach or elsewhere is a seller’s lender agreeing to accept less than what is owed to them. Period. End of story. Nothing more, nothing less. “
Currently as of this post date within Virginia Beach real estate listings there are over 140 properties in a short sale status:
A major drawback for buyers pursuing a short sale is the time delay for the bank to make a decision on the offer. Often the wait can be in excess of 30 days and then the offer leaving the buyer starting their home search from scratch.
For those not in a hurry to purchase, they can potentially do well on a real estate short sale deal. Read short sales are not a free ride.
Virginia Beach Real Estate short sale inventory as of this posting:
100,000 to 200,000 there are 47 homes on the market
200,000 to 300,000 there are 65 homes on the market
300,000 to 400,000 there are 20 homes on the market
400,000 to 500,000 there are 5 homes on the market
500,000 to 600,000 there are 3 homes on the market
600,000 and above there are 7 homes on the market
Also read:
Virginia Beach Real Estate Foreclosures for Under $300,000
Virginia Beach Real Estate Foreclosures for Under 400,000
This negotiation is all done through communication with a bank’s Loss mitigation department. The Virginia Beach or Hampton Roads home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.
Most Virginia Beach and Hampton Roads Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable. In 99% of all cases it is not a settlement-in-full. A deficiency balance will remain while the mortgage broker, real estate agent / broker, loan officers, title and closing agents retain their profit. No regulatory agency governs this hybrid transaction.
Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower’s financial situation.
A short sale typically is executed to prevent a home foreclosure. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing.
For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount.
It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.”
A short sale does adversely affect a person’s credit report though the negative impact is typically less than a foreclosure.
Short Sales are listed in the local MLS. Contact me for more information.
