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Jason LaPorte's Blog

By Jason LaPorte | Agent in 43147

What is a Short Sale?

columbus-ohio-short-saleWhat is a short sale? This is a question I get all the time because unless you were involved in a short sale, you typically would have no idea what it entails. Selling a house on a short sale can be a way to avoid foreclosure due to economic or financial hardships. Another situation would be if the homeowner’s job relocated forcing him or her to sell. In either scenario, the main reason for opting to sell short is due to the value of the home being higher than what is currently owed on the home.

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 buyer’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 you’re dealing with the bank who may be willing to take less than it’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 hasn’t approved the short sale. As a seller, you’re not profiting from the sale so purchase price virtually means nothing. The bad part is you typically can’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 you’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.

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