Why Would A Bank Close A Short Sale?

Posted by on Aug 20, 2010 in Foreclosures | Comments Off

Short Sale Shift

Welcome to shortsaleshift.com. Minnesota’s leading short sale agents, Josh Pomerleau and Sarah Willman are going to talk about why a bank would want to close a short sale.

One of the opening questions we get from home owners that are going through foreclosure or starting to miss their payments is “Why would a bank choose to do a short sale?”. Often times the home owners think that it simply sounds to good to be true. In spite of this, there are lots of reasons why a lender would prefer a short sale over foreclosure. At the end of the day, it saves the lender a lot more money to progress through a short sale than to go through a foreclosure.

There are lots of negative costs associated with foreclosing on a property. There are legal fees. Many times the property owner will leave the house. When that occurs, the bank has to worry about people breaking into the house and pilfering stuff. Also, the general maintainence of the home is ignored. There are also cases where house owners will damage their property because they are offended with the bank taking their home from them.

The bank looks at it like this. It is a good deal less probable that the home will be damaged when they close a short sale. It gives the home owner a sense of closure by not losing their home. Then the home owner can move on under their own control.

In addition, the bank will have to insure the house from all types of scenarios such as tornados and additional natural disasters. Those costs are also unconstructive to the bank.

At the end of the day that is why the bank would aspire to close a short sale. The bank also wishes to close on the house sooner than they could with a foreclosure. Getting that money from a short sale allows them to turn around and lend that cash out again. So, the time value of money is worth quite a bit to the lender.

Through the short sale procedure, statistics show that the lender will net greater money from a short sale than they will from a foreclosure.

Minnesota Short Sale Shift can answer your questions. We are Minnesota’s Foreclosure Avoidance and Short Sale Specialists.

Get more help from short sale Realtors, Josh and Sarah, at Short Sale Shift presented by the Short Sale Specialists of Minnesota

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