What is a Short Sale?

 

When a homeowners owes a lender more money than the current market value of their home and lacks other liquid assets to satisfy liens, it is often referred to as being "upside down" in a mortgage. this means the home will not sell for enough money to pay off their mortgage and other property related debt in full. In such cases, a "short sale" may be negoatiated with the lender to bridge the gap between the ballance due on the mortgage and an offer for the sale of the home. A short sale is an effort to save the bank the time and costly process of foreclosure.

 

A short sale may be an excellenta opportunity for a buyer who is willing to be patient; has their financing in order; and has no contingencies, i.e. the need to sell a home first or move in by a certain date.

 

Before you begin pursuing a Short Sale, here are some things you should know:

  1. "Short" sale is a misnomer. Short sales can take a long time - of ten months or longer. Keep your options open and continue to look at other properties while you wait.
  2. Pice is set by the seller and the buyer, not the bank. But the bank has the final say in approving the contract.

  3. Multiple liens recorded can be challenging. It is much easier to navigate a short sale when the seller is obligated to one lender. Multiple mortages means approval from multiple lenders.
  4. Your offer should be realistic. Lowball offers are generally rejected quickly by the bank, but even reasonable offers are not guaranteed to receive timely feedback.
  5. Comparable on similiar properties are required. As your Realtor, we will present you with the comparables on recent home sales in the area so you will be better educated to make an appropriate offer.
  6. Look for "approved" short sale properties. These properties have already had an offer approved by the bank, but the interested buyer did not complete the purchase. These are the most desireable, as the apporval process can be shorter.
  7. Banks set the rules. Some are looking for the hightes offer, others are looking for the largest down payment or lean towards buyers with cash.
  8. Properties are generally "sold as is". Repairs are seldom completed on a short sale, but a buyer may be issued a credit to have some necessary work done

If you decide a short sale may be right for you, we can provide knowledge, expertise and resources that can help you navigate the process.