Short Sales

What is a short sale?  They are the type of transaction today that we are seeing alot of.

A short sale occurs when the owner of a property owes more on their loan than they can sell their house for.  This is the simplest definition.

The owner for a myriad of reasons has determined that they must sale.  The reasons for this can include move due to illness, job transfer, job loss, etc.

Some things a buyer of a short sale needs to be aware of:

1.  Just because the house is listed for sale, does not mean that the seller can sell the house.

2.  When an offer is submitted to the Listing Agent on behalf of their seller, the buyer is submitting the offer contingent upon the seller's existing lender giving their approval of the short sale. 

3.  It can take the existing lender 30 days to 18 months or more to provide short sale approval.  Keeping in mind that the existing lender does not have to approve the sale.    What this means is that the buyer may want this house, make an offer and wait not looking at any other property for 6 months or more waiting on a seller's lender to make up their mind on the sale, and after 7 months the lender could come back and say that they will not authorize a short sale.

What does the seller do then?   A seller will continue to struggle to make their payment, move without making any more payments, try to get a renter, etc.

IF the lender decides not to accept the short sale, then this house will most likely end up being an REO (Real Estate Owned) by the bank.  The foreclosure process is lengthy and I'll address this in another post later.

Buyers and Sellers beware, a short sale can be a long process.  You want to work with an agent who will help you accomplish your homeownership goals.

Call me to discuss your real estate needs.