Why Would A Bank Accept A Short Sale?
It can sometimes go against everything we are taught about borrowing money, but in today's market, banks will gladly accept a short sale as an alternative to foreclosure. Here are three reasons why:
In A Short Sale, The Bank Never Owns The Home
It is often overlooked, but this is one of the major reasons why banks prefer short sales. Having to take back the home and then sell it at auction is a major undertaking that can be expensive. In a short sale, there is already someone who wants to buy the home, so that hassle is taken care of.
In A Short Sale, The Home Is Generally In Better Shape
It is a sad fact, but when people are about to lose their home to foreclosure, they will sometimes try to distance themselves emotionally from the home in order to cope. This can lead to the home not being taken care of, which makes it that much harder to sell. In a short sale, the seller is always being proactive and is generally more responsible.
In A Short Sale, The Bank Gets More Money
Ultimately, this is the main reason. Even though the bank is not getting the full amount of the loan, the amount of the average short sale is almost always significantly more than what they can sell a foreclosed home for at auction.