Why Would A Bank Carry Out A Short Sale?
Welcome to shortsaleshift.com. Minnesota’s top short sale professionals, Josh Pomerleau and Sarah Willman are going to discuss why a bank would want to close a short sale.
One of the first questions we get from property owners that are going through foreclosure or starting to skip their payments is “Why would a lender want to do a short sale?”. Often times the home owners think that it just sounds to good to be true. However, there are a lot of reasons why a bank would favor a short sale over foreclosure. At the end of the day, it saves the bank a lot more cash to progress through a short sale than to proceed through a foreclosure.
There are a lot of negative costs associated with foreclosing on a property. There are legal fees. Lots of times the property owner will leave the property. When that occurs, the bank has to worry about people breaking into the home and stealing things. In addition, the general maintainence of the property is neglected. There are also cases where property owners will damage their home because they are offended with the bank taking their house from them.
The bank looks at it like this. It is a great deal less possible that the home will be damaged when they complete a short sale. It gives the home owner a sense of closure by not losing their home. Then the house owner can move on under their own power.
Furthermore, the lender will have to insure the house from all types of scenarios such as tornados and additional natural disasters. Those expenses are also unhelpful to the lender.
At the end of the day that is why the bank would want to complete a short sale. The bank also needs to close on the property faster than they might with a foreclosure. Getting that cash from a short sale allows them to turn around and lend that cash out again. So, the time value of capital is worth quite a bit to the bank.
Through the short sale route, figures show that the bank will obtain greater money from a short sale than they will from a foreclosure.
Get more help from short sale Realtors, Josh and Sarah, at Short Sale Shift presented by the Short Sale Specialists of Minnesota
Filed under Foreclosures by .