The Best Guide In Completing Myrtle Beach Short Sales

Myrtle Beach Short SaleBuying homes under an unpaid mortgage is a good investment and it helps to know a little more about Myrtle Beach short sales before going through the process. You will need to learn everything that you can about this form of real estate investment especially since there are currently a lot of homes listed as a short sale.

A short sale happens when the homeowner is no longer able to continue paying for the property’s mortgage and the lender agrees to sell the property at mortgage payoff amount. To be able to remove the delinquent debt on their books, the lender will accept a lower amount than what the homeowner actually owed. The remaining balance will be forgiven as long as the mortgage amount has been paid.

Myrtle Beach short sales can be a hit or a miss

There are three key players in a short sale transaction: the buyer, the seller, and the lender. They can be affected by the process in varying ways:

A short sale transaction can be a hit or a miss for a seller, depending on how one looks at the situation. By choosing to sell his or her property as a short sale, the seller or the homeowner loses his chances of making some money out of the sale. On the other hand, when the property is purchased, the seller can walk away from the house without any remaining unpaid debts, although without money to help in moving to another house as well. Even though it will not badly damage the seller’s credit, a short sale transaction will still be recorded on his or her credit report.

Buyers benefit from short sale transactions considering the amount of money they saved from the purchase. On the other hand, the amount that they saved will most likely be spent on repairs and renovations. For some, this can be depressing since the reason they went after short sales is to save money. But for others, they look at it as an opportunity to personalize the house and make it their own. This is especially true for those individuals who like to purchase pre-owned houses and make some renovations to add their personal touch.

For lenders, they will lose some of their profits and this is probably the reason why they don’t instantly turn to short sales when one of the homeowners becomes delinquent in paying their mortgage. On the other hand, when compared with the financial loss that they will surely receive when the property forecloses, most lenders would gladly choose to approve a short sale.

When do Myrtle Beach short sales become a miss?

According to real estate experts, there are two situations when a short sale is certain to fail.

  • If there has not been any notice of default yet. If the homeowner has not received a notice of default, it means he or she is not that far behind the payments and would still be able to catch up. Should this be the situation, a short sale is not recommended as it will take a longer time to get the approval of the lender.
  • If the seller has already filed for bankruptcy, there is not a chance a short sale will ever happen. Short sales are, in some ways, not allowed in bankruptcies as they are considered a collection activity. As a result, lenders will not approve a short sale for a seller who has filed for bankruptcy.

Should you consider buying short sales?

The discounted purchase might be enough to convince you to pursue a short sale transaction. However, there are other benefits that you could gain as a buyer of short sale properties:

  • The lender may offer financing terms since they will be more than happy that the mortgage will continue, even though they will most likely not earn as much profit.
  • The seller will be willing to work with you to push the transaction through because he or she is eager to get away from the debt.

If you decide to proceed with a short sale transaction, hiring a real estate agent is highly recommended. Short sales are complicated and time consuming real estate transactions and you would definitely need all the help that you can get.

Aside from hiring a real estate agent to help you go through a short sale transaction, it also helps to know the primary reason why lenders will agree to a short sale. Since they are bound to lose money in a short sale, most lenders do not immediately agree to such a transaction until they are sure that they have exhausted all other possible solutions that wouldn’t cost them as much money.

But if you know what will make a lender agree, it will make the entire process less difficult and move in a faster pace. You will have to understand that the primary goals of lenders in every real estate transaction is to earn money or not lose too much of their profit. Hence, you might need to point out that by allowing the property to get foreclosed, lenders will have to go through a costly and equally lengthy foreclosure process. As a result, they lose their profits as well as a whole bunch of their money.

Even if they managed to maintain ownership of the property and not lose their profits, they are still bound to lose money in maintaining the house and paying for its taxes.

Basically, lenders look at short sales as the lesser of two evils and they will grab the opportunity to go through it rather than lose both their profit and money.

Give Jerry Pinkas Real Estate Experts a call now to learn more about Myrtle Beach short sales.

Jerry Pinkas Real Estate Experts
604 N. 27th Ave
Myrtle Beach, SC 29577

Your Myrtle Beach short sales expert.

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