What is a Quick Sale in Real Estate?
Real estate has different laws and terminologies. One of which is a quick sale. This is the most widely used term in this field of business. A better understanding of what a quick sale is is quite important. As a businessman, you can determine how to make a large amount of profit if you have enough knowledge about the most common real estate terms. For debtors, on the other hand, there are some benefits to knowing this information as well.
There are quite a few things that you need to know before getting fully involved in this type of business. Some of these things would include the benefits to both debtors and business owners, the function of a short sale, the entire process and its effects.
For starters, a quick sale is a form of business that involves buying a property for less than its normal value. This typically happens when the borrower or homeowner is unable to pay the mortgage loan. After a couple of months of default on the loan, the lender decides to sell the property for a lower price, rather than putting too much pressure on the borrower.
The entire quick sale process begins when both parties agree to sell the unpaid property for relatively less than the outstanding balance. Since this involves a large amount, real estate attorneys for both parties must be present. By doing this process, you guarantee both the borrower and the lender that the entire process will be carried out legally. This is additional insurance that no one will be scammed and that both parties will benefit equally.
The debtor must sign a consent form saying they agree to the short sale agreement. The bank will also sign another consent form if the institution agreed to the price offered. The bank has the power to challenge the amount offered. There are cases in which the buyer has to wait for the bank’s decision; it can vary from two days to five months.
Once everything is settled, including the legal papers, the property will not be foreclosed on, saving you fewer bank fees and other expenses. Borrowers, on the other hand, will benefit as having a low credit score can be avoided.
When it comes to business, most people take advantage of a quick sale to make big profits. Let’s say, for example, there is a property with an outstanding balance of $300,000. You and the lender can agree to pay the remaining balance in $250,000. After which, the entrepreneur is not required to pay the remaining $50,000.
Since you have agreed to pay a lump sum, the bank accepts that the debt has already been paid. After which, they take advantage of this great opportunity to sell the property for a higher price.
Understanding the process will help generate profit. You just have to better understand the process and seek the help of experts to better appreciate the whole picture.