A short sale means when the bank is saying we might take less on this than what the loan is calling for on pay off. The other to this is called arm length sale. This is your typical agent putting a home on the market and attracting buyers. You usually can treat a short sale like a foreclosure. It just means that it is not in foreclosure yet but it may be close. The sellers are saying we will take any offer we get and it will be up to the bank to accept the offer. Some times you can find some really nice short sales.

Deborah,

If you want to email me the property address, I can get you detailed information about the home or even arrange for a private showing at your convenience. I'm a local Realtor. As others before me have explained already, a short sale means that the lender might accept less than the mortgage payoff. The lender will approve any offer. The seller is to receive no profit from the transaction.

andrea@millsrealestate.net

The term short sale is being thrown around very loosely these days, but it is a specific type of real estate transaction and has many factors that help determine if it meets the criteria. A short sale must be disclosed in the MLS. If a homeowner has gotten significantly behind in their payments, and has a recent documented hardship, and has no assets to cover their loss, the bank may decide to entertain "A Short Sale." This saves the bank going through the foreclosure process (which can cost the bank upward of $40,000 in most areas) and saves the homeowner a foreclosure on their credit report. The down side is the bank is going to minimize its risk and exposure and will keep entertaining offers to see if they can minimize their losses. The link below is for a decent article on short sales. Remember the short sale process is not for the "faint of heart" or those who need to move quickly on a sale, but may be an area where a savvy investor can take advantage of the current market. (Banks are wise to quick turnarounds, so don't try to do a "flip" on these)

Short sales have worked relatively well here in the Panhandle of Florida. If the home is listed with a reputable real estate agent who does short sales regularly, the agent knows how to work with the bank to get the deal done. Yes, the seller owes more than he can get for the home at today's prices, and it is easier for the bank to do a short sale than go to a foreclosure. Don't try to do a short sale without the guidance of a knowledgeable real estate consultant. It can, however, be a great way to get a great deal on a property, because the seller is getting out of a bad situation, the bank avoids many expenses and time, and the buyer gets a great price. If it goes to foreclosure, normally the bank sends a representative to the court house steps to bid on the property, and is authorized to bid just below market value for the property, they buy the property, and turn around and list it with a realtor of their choice.

Short sales are when the current market value of the home is less than what the seller owes on the mortgage, and the bank is possibly willing to accept less than what is owed.
We recently sold a home for $740k that the buyer purchased last year for $829k - that was not a short sale
simply because there was no negotiation with the bank on the mortgage. The sellers had the $$ to make up the loss, and that was the best way to proceed as they did not want to negatively affect their credit.

Hi Deborah:

Legal definition of short sale:
A sale of a house in which the proceeds fall short of what the owner still owes on the mortgage. Many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage when the owner cannot make the mortgage payments. By accepting a short sale, the lender can avoid a lengthy and costly foreclosure, and the owner is able to pay off the loan for less than what he owes.

Now, before you proceed with purchasing a short sale property, understand that it will not be like a regular purchase. Acceptance of an offer an a short sale can take weeks. It is very important that you are working with a Realtor experiened in short sales so that she can help you sidestep any short sale land mines!

To help you better understand what you might be getting yourself into, here is an article that will help:
http://homebuying.about.com/od/buyingahome/bb/BuyingShortSale.htm

Good luck!

I just wrote about a short sale on my blog. It is often a problem, but occasionally works out for all involved.

A short sale means absolutely nothing but trouble and frustration!

You are dealing with a seller who is losing their life, their home, their spouse, their world is dead.

You are dealing with a loss mitigation department at a bank or worse, a contract firm hired by the bank. They are trying to mitigate the losses of the bank.

Save yourself the frustration. Let the bank take the home back and deal with the bank that needs to free their money up to loan out out again.

Duh! This is not rocket science. Why do you want to put yourself through a short sale? You think you'll get a great deal? Think again.

Buy a bank owned home. STEAL IT please! COuntrywide hit their equity line for 15 billion dollars to have more money to lend and then sold an interest in their company to Bank of America to get another 12 billion. HELLO?!?!?!?!?!?!?

How come I can't talk to these short sale buyers before the short sale experts get to them?

The term "short sale" means that a buyer has a chance to short the second mortgage or even the first mortgage on the property. A better break down would be as follows: If a second mortgage is owed on the home in the amount of $60,000.00, this mortgage could be satisfied for pennys on the dollar. In other words, you could negotiate with the 2nd mortgage holder and settle for paying them a much less amount to release the mortgage.