Hi Cvance_99,

A short sale is when a property is sold for less than the debt on the property.

Short sales are getting more and more popular since the financial and housing market crisis with many people facing the possibility of foreclosure. A short sale can be a good exit strategy for a seller in both distressed and motivated seller situations. In order for a short sale to occur however, the note holders (ones who lent the money, bank) will have to agree to allow for a discount as payment in full on the property. The bank is brought into a transaction where it normally would not be involved, and they can be an extremely frustrating player to have in the transaction for a buyer and a seller. They will need a slew of documents from the seller to justify the reasons for allowing the short sale. When they are involved, they tend to dictate the process, can be difficult to communicate with and could leave you in limbo without an answer while your other home purchase possibilities are lost to other buyers.

While a short sale may aid a seller from part of the financial burden associated with owning a home that is worth less than the debt and lessen the blow on their credit rating, it requires all involved to be extremely patient in the process. In order to purchase a property that is a short sale, make sure that it is worth it to wait it out. It sometimes takes as long as 6 months to get a short sale home closed. I currently have one that went under contract on April 23, 2009 and is finally closing this week (after more than 6 months). I represent the buyer, who although extremely patient, has been on and off the fence on this purchase multiple times.

As a buyer, I recommend that you are sure that the value in making a short sale purchase is real. There is a rather large inventory of homes on the market right now, many that are priced right and being sold the conventional way. I would only recommend purchasing a home in a short sale if it is the perfect home for you, it's priced at a reasonable discount, and you are patient. Otherwise, you should leave those ones for someone else to deal with and the frustration of the process.

While I do not want to turn you or other readers of this blog off on the idea of purchasing short sale property, I do want you to be prepared for a realistic expectation should you decide to pursue this home purchase strategy. I wish you successful pursuit of the perfect home for you and your family.

Thanks,

Ross Harkness, Realtor®/Builder
Palmetto Property Pros Team
Wilkinson and Associates Real Estate
(803) 372-8867

they owe more than the market will bring to sell. Economy.....

This is when a homeowner attempts to sell his home for less with lender approval rather than the lender taking it back through foreclosure proceedings. By doing so the homeowner could salvage his credit rating and rid himself of the encumbrance of a huge mortgage.

The seller sets the price either by himself or with the assistance of a real estate agent. Offers submitted to the lender are subject to lender approval. It is easier to work this through if there is a single lender involved. It becomes difficult and very tedious working with several lenders and sometimes with the insurer. Depending how many offers have been submitted and rejected, the potential buyer needs a lot of patience. Lowball offers can be rejected or receive slow recognition.

Homes are usually “sold as is” since there are almost no funds to make repairs. The buyer should keep this in mind when submitting an offer. One other important factor, the buyer must be prepared to close on time. Meaning that the buyer must have his loan and financing ready to go.