What is a Short Sale?

What is a short sale? A short sale is an alternative to a foreclosure, the legal process where a lender seeks to recover the balance of a loan. In a short sale, the lender and borrower agree on a payoff of less than the balance due on the loan.

Investopedia defines a short sale as: “Any sale of real estate that generates proceeds that are less than the amount owed on the property. A real estate short sale occurs when the lender and borrower decide that selling the property and absorbing a moderate loss is preferable to having the borrower default on the loan. It is therefore an alternative to foreclosure.”

While being an alternative to a foreclosure, there are downsides, such as negative consequences to your credit score. Credit Sesame has laid out the details and pros and cons in the infographic below:

What is a short sale

(Image via creditsesame.com).

3 Things to Consider When Finding Your Dream Home

So you’ve decided to buy your dream home. Congratulations! You’ve been pre-approved, know your budget, and have a list of what you’re looking for.  Here are three other tips to help you make the right investment:

1. Do Your Research on The Neighborhood

It is easy to be swayed by a beautiful house with all the right features, but don’t forget to investigate the neighborhood. Are you close enough to everything you need, like grocery stores and pharmacies? Or if you want peace and quiet, are you far enough away from noisy streets? Consider what kind of neighborhood you would like to be in before you begin your search so that you can be sure you love where you live

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2. Know the Age of the Property

You’ve found the cutest house of your dreams, straight out of an old Hollywood movie. But, does it need some TLC? Will certain aspects of the house need to be brought up to date? Be aware of the age of a property and any necessary work that may need to be completed. It is also important to consider if modern upgrades will truly be feasible in the home. Determine how much work you are willing to do and what you want to have move in ready.

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3. Consider Size & Space

Be realistic about how much space you want and need. Having enough space is crucial, but having too much space can be overwhelming. If you know that you will have visitors frequently, be sure that the property has enough space so that you don’t feel crowded. If you are trying to downgrade, make sure that you can easily manage maintenance and cleaning of the property. If there is too much space, the upkeep may become difficult or costly. Be realistic about what kind of space you want -inside and outside- and you will be perfectly content in your new home.

Have any tips we missed? Sound off in the comments!