Home Buying in 11691>Question Details

Momoftwins, Other/Just Looking in 11691

What is a "short sale?"

Asked by Momoftwins, 11691 Tue Aug 17, 2010

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You have already gotten your answer on what a short sale is, but another question would be, "Do I want to buy a short sale?" I know that many people here will tell you that they have had a lot of success with short sales, there will be more of them who will tell you that the process is anything but short. Just because the price seems good to you, it doesn't mean that the bank will agree that it should sell the house for that. If you are looking in an area where there are so many short sales that it is hard to find a home that is not, then at least find a home that only has 1 loan on it, rather than 2. Back in 2007 and before, the idea of the 80-20 loans, where the person was financing the entire 100% or even more with 2 different loans, was common. The person then has to get both banks to agree to the sale, which prolongs the process. Your twins could be in college before they approve it.
1 vote Thank Flag Link Wed Aug 18, 2010
A short sale occurs when an owner has proven hardship to the lender and the lender agrees to accept less than owed. Keep in mind that the seller can accept whatever offer he/she wishes, however the lender decides to accept, reject or at times counter offer--they are by no means fast sales, unless already pre-approved by the lender.
0 votes Thank Flag Link Wed Aug 18, 2010
Selling your home for less than you owe the bank, is the initial portion of the short sale. But an important component is the inability to PAY that shortfall, through hardship.

Just because you sell your home for $20,000 less than you owe the bank, doesn't make it a short sale, if you have the ability to bring that $20,000 difference to the closing table. Unless you can show hardship, of one sort or another, the bank is unlikely to agree to absorb the loss for you.
0 votes Thank Flag Link Wed Aug 18, 2010
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
A short sale is negotiated through the mortgage holder of an owners home where by the mortgage holder agrees to take less than what home owner owes on the property. The home is put up for sale with a Real Estate agent.
The bank looks over all the offers and accepts the most palatable one. If the bank accepts a short sale, the foreclosure is stopped. The owner does not garner a foreclosure on his credit record, or a deficiency judgment chasing after him for a lifetime. If you have any questions please feel to call or ask a agent that kowns how to work short sales.
Fajardo Delacruz
Licensed Real Estate Agent
Century Homes Realty Group llc
Direct Line: 347-932-0609
0 votes Thank Flag Link Wed Aug 18, 2010
Let's say an owner has a $300,000 mortgage on a house that they bought at the height of the market. That house is now worth $200,000 and they can no longer afford to make the payments. Unless they can make up the difference, they can't sell conventionally because they would still owe the bank money and title cannot be transferred to a new owner unless all liens have been taken care of. The owner has to go to the bank and see whether the bank will agree to taking less than is owed and let the owner off the hook. This is a short sale. Also, in a short sale, not only does the buyer and seller have to agree on the final sales price but the bank has to agree as well. In most cases, the bank requires that the buyer and seller enter into a full contract of safe complete with buyer down payment before they will consider the offer. If you're considering buying or selling a short sale home or have any other real estate questions, please feel free to contact me.

Ralph Windschuh
Certified Buyer Representative
Senior Real Estate Specialist
Associate Broker
Century 21 Princeton Properties
631-467-0009
rwindschuh@c21princetonproperties.com
In The Top 2% of Century 21 Agents Nationwide!
0 votes Thank Flag Link Wed Aug 18, 2010
Seller selling there home for less than what is owed to the bank with the banks approval.

Thanks

Chris Blasic
Realty World & Associates
0 votes Thank Flag Link Tue Aug 17, 2010
Hello Momoftwins:

In the simplest definition, a short sale happens when a seller cannot sell their home for enough money to pay off everything they owe on the home.

Often, a lender agrees to accept less than the mortgage balance in exchange for clearing the title to allow a buyer to purchase the home. In exchange for that, the seller's mortgage lender usually gets to approve all of the terms of the sale and the seller cannot profit from the sale.

Short sales are usually less expensive for a lender than actually foreclosing. They can be complicated and taker a long time for the lender to approve things.

Hope that helps,

Alan Rieger
CENTURY 21 Alliance - Audubon, PA
0 votes Thank Flag Link Tue Aug 17, 2010
A short sale is simply that you are asking your mortgage holder to accept less than what you owe.

Linda
Web Reference: http://www.lindacefalu.com
0 votes Thank Flag Link Tue Aug 17, 2010
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