The biggest hurdle is convincing the bank (aka lender, investor, etc) to sell short by having your agent submit documentation along with a hardship letter explaining your situation. From a buyerâ€™s perspective, a short sale can be good or bad. It can be good because you can sometimes get a great deal on a short sale as youâ€™re dealing with the bank who may be willing to take less than itâ€™s worth. The downside is that it can be a lengthy process. As a buyer you do have an escape clause allowing you to retract the offer in writing without penalty provided the bank hasnâ€™t approved the short sale. As a seller, youâ€™re not profiting from the sale so purchase price virtually means nothing. The bad part is you typically canâ€™t apply for another mortgage for at least two years.
You may have heard that short sales take forever to close. This is because it usually takes the bank awhile to approve the short sale. Some banks can turn an approval around very fast while others take months. If youâ€™re looking to sell or buy a home on short sale, be sure to choose an agent who has the experience as this can save you time and headache.