Short Sales are beginning to make the scene in Lake Charles Real Estate. Although the Lake Charles Real Estate market is viable and healthy, we do have foreclosures and short sales listed for sale in Lake Charles. Deciding on a short sale vs foreclosure is a serious decision for a Lake Charles homeowner. Homeowners may struggle to make their mortgage payments for reasons such as unemployment, a decrease in income, illness, divorce, adjustable rate mortgages, etc.
A short sale is an agreement in which the mortgage lender agrees to accept a payoff on the loan for less than the balance. Many lenders agree to a short sale because they receive more of the loan balance in comparison to the amount they would gain from selling the property following a foreclosure. This process also aids in maintaining home values in the community the property is located and helps the homeowner maintain a better level of credit compared to a foreclosure.
Common reasons for a Short Sell or Short Sale:
- Loss of income or unemployment
Why Short Sell?
- Avoid foreclosure
- Save your credit
- No deficiency judgment
- Purchase another home in shorter amount of time
When a Lake Charles home for sale is a foreclosure or short sale property, the Bank becomes the “Seller” and therefore the bank must approve any offer submitted. The listing real estate agent is really only a facilitator for the bank and transfers all paperwork to the bank for approval. Banks are willing to work with home owners to avoid foreclosure because they already have a high inventory of foreclosures on the bank books. A Short Sale is a better alternative and less carrying costs for the bank.
A short sale is not a typical real estate transaction. Most real estate transactions involve the home seller and their real estate agent. In a short sale situation, all of those parties in addition to the seller’s loan provider, any lien holders, and insurers may be involved too.
When a buyer makes an offer on a Lake Charles Short Sale Home, it will usually take longer than 30 days to close especially if the buyer is obtaining financing. Patience is a virtue when it comes to short sales and foreclosures! Lake Charles Short sales and foreclosures are almost always listed for sale AS IS WITH NO REPAIRS. Lake Charles buyers should also be aware that the Seller will usually not assist with closing costs or make any repairs to the property. So if the buyer is obtaining an FHA loan or USDA loan and needs closing costs or repairs to obtain the mortgage, chances are a short sale is not going to work for the buyer. The buyer still has a right to inspection and will be responsible for having utilities turned on in the buyer’s name for said inspection.
As a Lake Charles home buyer if you find a Lake Charles home to purchase that is a short sale, make sure you understand upfront how a short sale works and what is involved.