Property Owners, Investors and Lenders Benefit From a Commercial Short Sale

A commercial short sale is advantageous for the property owner, the real estate investor, and the bank or lender. A real estate investor finds a property with a discounted price and he earns good profit by making the needed repairs and then selling the renovated property at a higher price. The advantage for the lender is that he is able to avoid the costly process of foreclosure and being saddled with a non-performing asset that is difficult to sell particularly during an economic downturn. The owner benefits by avoiding foreclosure and its negative impact on the credit score with the chance to start all over again.The property owner may consider a commercial short sale as one of the alternatives when conducting or having someone else perform a prudent commercial loan review. Oftentimes he may hire a professional who is knowledgeable and experienced in examining a particular situation, to make this review. This entails the thorough analysis of the mortgage documents and then negotiating with the bank for a possible mortgage adjustment. If the lender had tried to take any shortcuts at the time when the loan was provided, these could be used to strengthen the position of the borrower during the negotiations.Meanwhile, the lender will have to approve the transaction, whether it is an adjustment of the loan terms or a commercial short sale. The borrower may choose the latter approach when he has determined that he no longer needs the property or when he no longer wants to pursue that particular business that made use of this particular asset. The selling price during such a transaction is usually lower than the unpaid component of the loan but the bank may approve the deal if the calculations indicate that he will likely lose more by pushing through with a foreclosure.

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