Real Estate News Daily

The practice has been known for a long time but is seldom chosen by lenders as a solution for property owners who are facing foreclosure. The process has a house being sold for less the amount of money that is owed with the lender swallowing the little loss in the sale (that’s why they don’t like it!!). If you happen to mortgage holder, it is very much cheaper than having to settle for a foreclosure but as said, the practice has almost been forgotten during the long boom in the industry. But now, there may be no choices for all sides are set to lose a lot if they do go into foreclosure. Foreclosure entails a lot of taxes, legal fees, insurance (to prevent the property from becoming worthless) and the increasing cost of maintaining the said property till it goes up for sale again to another buyer.

This almost forgotten practice is now experiencing resurgence at a rate of 18% of total house sales in the industry. There are pitfalls which the lenders can initiate that could cause a total failure of the deal for they are taken into the equation for the sale to take place. Real-estate agents also see the success rates of such moves as very low for there is less money for all in the whole picture. One agent quoted getting 65 listings for short sales but estimate only about 2 or three to follow through. Buyers are advised to be cautious for however tantalizing the deal may be, the high-risks associated with it does indeed make for one balancing act.