In the current times the real estate market is seeing a drastic rise in the number of short sale listings. What is a short sell you ask? A short sale is when market conditions are so that the value of your home is worth less than what you currently owe on your mortgage and you decide to sell anyway. That's when you know you're in a short sell situation. How and why would someone sell their home if they will end up minus cash?
The why is easy to explain. The majority of reasons center around a home owner not being able to afford their monthly mortgage payment. Due to whatever circumstances such as job loss, divorce, or an unforeseen financial emergency more and more homeowners are considering short selling their home. Another factor that has plays a major role is homeowners with adjustable rate mortgages (ARMs) not being able to afford their monthly payment when it adjusts to a higher interest rate. It makes matters much worse when the current market conditions are bad and home prices are falling. Most homeowners facing these situations could have opted to refinance or borrow money against their home based upon their home value rising. A short sale is also a better alternative to foreclosure in which your home is taken back by the bank or lender, you get left with nothing to show for it, and your credit score is left virtually trashed.
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