A “short sale” listing is one which is listed for less than the seller owes in mortgage/s. The seller’s goal is to get an offer the seller can take to the bank to ask them to “go short” or take less than what they are owed. The seller does not care what price they get, but they are motivated to get a price they think the bank will accept. There are many variations as to methods and time frames, but typically it takes two weeks to two months or more for the bank to have an appraisal done and respond back to the parties. The bank may either accept the offer as-is, or ask for more money. With some limitations, the buyer can continue looking for other properties while waiting for a bank response. Conversely, other buyers may also submit competing offers during that time period – though usually the listing agent will not actively solicit other offers if they feel good about the offer they have. In the event there is more than one offer on the property some banks will work with the highest one first, others may just counter all offers at the same time.
A short sale listing which is marked “contingent” as opposed to “active” already has one or more offers on it.
Most listings on the Central Coast in the lower price ranges right now are short sale listings. And half or more of those listings already have at least one offer on them.
Just because a listing is contingent does not mean one cannot make an offer on it, it just complicates things. Nothing is easy I guess.
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A short sale is when the proceeds of the sale fall short of the balanced owed. For example: A seller owes $350,000 to the bank while the current appraised value is only $300,000. A short sale usually takes place to prevent a foreclosure, but the decision to accept a short sale is left up to the sellers bank or mortgage lender. Every short sale is contingent on the sellers bank or mortgage lenders approval.