Buying Short Sale Property in Jacksonville
For anyone who is thinking about buying a home in Jacksonville and are considering Jacksonville short sales as an option, it is important to have a firm understanding of what a short sale entails.
When a home buyer makes a purchase on a home, he or she typically finances the purchase by obtaining a mortgage loan through a bank or mortgage lender. The lender then has a legal interest in the property which is used to secure the loan until the loan is paid in full. If the borrower defaults on the loan, or is unable to continue making the monthly payments, then the lender can foreclose on the property. When the lender forecloses on the property, the lender takes possession of the property and sells it in order to cover the balance remaining on the loan. Under normal market conditions this process works to the lender’s advantage because the home has usually appreciated enough that selling it will more than cover the balance owed on the loan. Sometimes, however, market conditions dictate that a foreclosure it not really in the lender’s best interest because the fair market value of the property is worth less than the balance on the loan. This is a situation that many in Jacksonville and much of the country have been facing over the past few years.
Homes prices in Florida had been appreciating at a much faster than normal rate just before the nation was hit with the real estate market crash in 2008, which was when homes depreciated in value at a rapid speed. Mortgagees in Jacksonville (along with other lenders throughout the state of Florida) that had secured mortgage loans with properties began to find themselves in a situation where they would no longer be able to sell these properties for what they were once worth when the loans were first distributed. Thus, when a number of their borrowers ended up foreclosing on their loan, they often agreed to what is known as a “short sale.” In essence, a short sale allows the home owner/borrower to sell the home for its current market value even if he or she owes more than that on the mortgage. The lender then agrees to forgive the remaining balance due on the mortgage. The lender may or may not offer debt forgiveness on the remaining balance of the loan.
If you are buying a home in Jacksonville in the near future, there are some advantages to buying Jacksonville short sales instead of a foreclosure. With a short sale, the home owner is usually still living on the property, meaning that the home is likely to be in better condition than a home that has been abandoned by the home owner. Although a short sale might take more time to negotiate than a traditional sale because the lender must agree to the sale, it is in the lender’s best interest to complete the sale sooner than later so they will likely try and work it out as quickly as possible. Finally, a short sale has not incurred the additional time and expense of a foreclosure so the lender is often anxious to work out a deal before the home goes into foreclosure and those expenses are incurred.
If you are planning to buy a home in Jacksonville, Florida within the near future and wish to explore the opportunities that a short sale offers, be sure to talk to your real estate agent. Because the process for buying a short sale is a bit more complicated, you should depend on an experienced real estate agent to help you locate Jacksonville short sales and to guide you through the process.