So what exactly is a shot sale anyway? A short sale is when a home is in pre-foreclosure and the bank allows the owner to list the home with a Realtor and try to sell the home and avoid foreclosure. In most cases it is being sold for less than what is owed to the bank. The owner may be very behind on the payments, and may also have multiple loans on the home. The bank(s) will agree to the short sale because they will ultimately recoup more money a lot faster than if they had to go through the foreclosure process. Also, if the home was foreclosed upon, usually only the primary lender gets paid. So if  the owner has 2nd mortgages, or lines of credit with other banks, they may not even get paid at all if the house goes into foreclosure. The owner makes out because even though they are paying back less than what they owe, their accounts are marked settled and paid, also there credit does not suffer as badly as if the property was foreclosed on.

This works out well for the potential home buyer as well. He or she is able to purchase a home in the Lehigh Valley for less than market value, usually 10 to as much as 30 or 40% below actual value of the home. One thing to consider is that the bank(s) approve all offers, and the homes are being sold as-is, and quite often the may need minor repairs and/or TLC. Time is another factor to consider, it may take the bank(s) up to 6 or even 8 weeks to approve the offer.

If you look at the big picture, everyone makes out. The banks recoup most of their money and don’t have to deal with the hassle and expense of the foreclosure process, the seller gets to save their credit and satisfy their account(s) and best of all, the buyer gets a good deal on a pre-foreclosure in the Lehigh Valley!

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