1) the home must be under contract
2) the Lenders and lien holders must accept that discounted payoff amount.
The objective of a short sale is to obtain written confirmation of the recordation of release or Satisfaction of Mortgage from the mortgage Lender upon receipt of the funds. All liens and encumberances must be cleared at the time of closing to get clear title.
Its not enough to just have an Real Estate agent with the Short Sales and Foreclosure Resource (SFR) certification from the National Association of Realtors. Its also imperative to have an attorney that's extremely experienced with short sales and foreclosures. Many times a property is proceeding to foreclosure as well as a short sale at the same time by different departments of the lender i.e. Loss mitigation Dept. and the Foreclosure Dept. Many Buyers have had deals fall through because the foreclosure auction/Sheriff sale occurred before the short sale closing. There are many other issues that your attorney must look out for.
Short sales are known to take between 4-6 months. So sit down with your agent and attorney before commiting to purchase a short sale or foreclosure property.
Best of luck!
Short sales can be a good opportunity to get a good price, which is usually not a lot less than the listing price. Banks usually price things to move.
Again, if you are not in it for the long haul - several months, don't bother with a short sale. You will wait. There are really a lot of other properties out there if at good prices if you don't want to wait.
However, something I have noticed with banks is that the better the offer and the buyer is, sometimes the faster (usually 3 months instead of 6 months) acts. Depending on the bank, an FHA loan will usually take a long time to get an answer, opposed to a 20% down or cash deal. The fastest answers are cash deals with decent earnest money and offer prices within 5-10% of the asking price. The lower the offer, the longer it takes to get an answer.
There are some short sales that are already negotiated for a certain price or are part of the HAFA program, which have different rules. Those may go faster.
But I agree, you should deal with someone who has experience and training in short sales. If you want more information, contact me.
Suzanne Hamilton, RE Marketing Consultants 888-788-9544 or firstname.lastname@example.org
Short sale and foreclosure requires lender approval can take approx. 30 -45 days receive a response IF lender choice to accept your offer. Always best keep looking much drama is involved NOT due to agents how banks conduct business.
Short Sale = Property owes more than what the home is valued CAN'T sell home UNLESS the lender(s) agree to take less .
Regular Sale = Does not require lender approval. you receive response to sales offer within a 24 - 48 hour, and close within 45 days - or + Less drama
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
Feel free to give me a call.
There are several things you need to know as a Buyer interested in purchasing a short sale. First the Seller still owns the property (it is Not Bank Owned-yet). Second, you need to do your homework to determine if there is more than 1-mortgage on the property. If there is a 2nd mortgage, it is very difficult to get a short sale approved. Third, it can take several months to get a response from the Bank (Lender) on your offer. Short Sales are always subject to 3rd Party approval, always in As-Is Condition, 100% tax proration, and will not provide an updated survey for the property. The reason for the long waiting time, is the bank has to perform in-depth checking and verification, to see if the Seller meets the qualifications of Hardship, Financial Distress, and are unable to be approved for a Loan Modification. If the Seller is using a qualified Real Estate Agent and Short Sale Negotiator, this will be instrumental in moving the approval process faster.
Getting qualified guidance as a Buyer (and Seller) is critical to the success in purchasing (and Selling) a short sale. You may be able to get a great deal on a house, however you will have to be patient to wait out the long approval process.
Best of Luck,
David Jaffe- SRES, CDPE
A short sale is a property being sold for less than what is owed on the mortgage. The contract can be signed by all parties; but it must have lender approval to proceed. The biggest difference - a regular sale can take place in 30 days or so....a short sale at least 2-6 months at least...if at all.
"Short Sale Approved" entices you into thinking the process will take a shorter period of time....but only if you're lucky.
Banks tend to approve these types of sales because, in the long run, it saves them money. Their alternative is to foreclose on the home, which would require them to incur the cost of attorneys and so on. Short sales can take an inordinatley long time to close because of the bank's involvement. The current owners must provide a great deal of paperwork to the bank to prove they need to sell the home or face foreclosure, and the bank must approve the sale at every step along the way.
It can be a frustrating process for all involved. It is essential that buyers and sellers, therefore, work with realtors who are experienced in handling short sales. One thing a consumer should look for is the SFR designation (Short Sale and Roreclosure Resource) Savvy home buyers can often get a good deal on a home if they are willing to be patient.
A short sale is one in which the seller has shown proof that to the bank, that owns themortgage on their property, that they have had a hardship and can no longer meet their financial responsibilities. The bank sends an appraiser to establish a value for the property. A realtor is hired to market the property, as a "Short Sale". once the bank gives permission to the seller to do so. The list price has not necessarily been approved by the bank. The bank has only given permission to the seller to sell the property for less than what they owe, however the offers usually come in lower than list price and/or appraised value. The process can be lengthy depending on the bank involved. If there is more than one mortgage on the property, both banks (if they are different) have to agree to the short sale. It is not for everyone, however if you can hang in there, you may make a terrific purchase. My advice is to make sure that you are dealing with an agent who has had experience with short sales and definitely use a real estate attorney to conduct your closing.