The Buyer’s Guide to St. Louis Short Sales
You’ve probably heard a lot about St. Louis short sales, but you might not know much about how they really work. St. Louis short sales are a type of home sale in which the seller accepts an offer that is actually below the amount left on the seller’s mortgage. In short, the St. Louis seller is accepting an offer even though it won’t cover the mortgage.
Below is our complete homebuyer’s guide to St. Louis short sales.
Why Sellers Choose St. Louis Short Sales
There are several reasons why St. Louis sellers might do this. In some instances, they may know they won’t be able to keep making mortgage payments. Maybe the sellers lost their jobs or had a bad accident and are unable to pay both mortgages and medical bills. St. Louis short sales usually close quickly, so sellers will get the money and be able to pay back most of their loan.
This is also better than going into foreclosure because the seller’s credit score will take less of a hit. If in a few years the seller is able to get back up, he or she can purchase a St. Louis home without too much trouble.
St. Louis short sales also give homeowners the dignity of selling their own home. It’s a less than ideal situation, but sellers can try for as good a deal as possible. They’ll also be able to live in their homes until the sale is complete, which means they won’t have to vacate quickly and find a new home with little warning.
Banks will accept these deals because foreclosure is a hassle for them too. If a house is foreclosed on, then the bank assumes responsibility for maintenance and selling the home. Banks want to avoid this, so accepting a short sale is sometimes better in the long run.
In short sales, banks also handle the closing costs, which saves both the buyer and seller money.
How to Get in on a Short Sale
Short sales look like any other real estate sale. If you’re looking specifically for short sales, then you first want to find a real estate pro who specializes in these sales. There’s a lot of paperwork and hoops to jump through, so you want to be sure you have everything lined up when you make an offer.
When your offer is accepted by the seller, the seller then has to go through the bank and get the bank’s approval. This is where things can get difficult. The bank knows it’s going to be getting a loss here, so they’re going to try and make as much money as possible.
In order for a short sale to go through, the seller must convince the bank that this is the better deal because the seller won’t be able to make mortgage payments. They’ll need to show bank statements, W2s and tax returns as well as other financial documents to show that the money is no longer coming in.
This can be a long process. There’s a lot of back and forth with the bank, and you might be waiting for a long time for the sale to go through. But in the end, you should have a home for a good price.