Home Buying in Pelican>Question Details

davismeow, Home Buyer in Cape Coral, FL

what is a sort sale????

Asked by davismeow, Cape Coral, FL Thu Feb 13, 2014

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Assuming you mean short sale--A short sale occurs when an owner has proven hardship to the lender and can sell for less than owed on his/her mortgage; the owner can accept whatever offer he/she wishes, but the lender decides to accept, reject or counter offer; short sales are by no means fast sales, much will depend on the number of liens involved, who is negotiating the sale for the owner, timely paperwork, etc., therefore much patience is oftentimes necessary...
3 votes Thank Flag Link Thu Feb 13, 2014
I see others have explained what a short sale is. If you are looking to purchase a short sale please feel free to contact me. I have a great deal of experience with short sales with both sellers and buyers and would be more than happy to assist you. You can email me at leecountyrealtor@earthlink.net or give me a call at 239-707-4575.
1 vote Thank Flag Link Wed Feb 19, 2014
Several Realtors have made comments explaining what a short is. The success of a short sale transaction depends on the seller. They must be able to convince the lender of their hardship. The seller must be willing to submit their current financial information to prove the hardship. If all goes well the process will take several months. If the process has glitches, it will be much longer. I had one take 10 months. Another issue is the price. The listing price is often a starting point in negotiating the sales price. The sellers’ lender will compile their own opinion of value. The figure the sellers’ will “take” is undetermined unless the home has been previously negotiated.
1 vote Thank Flag Link Sat Feb 15, 2014
It is a real estate term translating loosely to "great pain and suffering, sometimes outweighed by a good deal, but not usually". Short sales are not for the faint of heart, and trust me, I have a lot of experience with them both as a buyer and an agent. My current home was a GREAT deal and a short sale and very painful, but it was back in 2011 when there were far more good deals to be had. Proceed with caution and make sure you have a really good, really patient Realtor at your side...Best of luck!
1 vote Thank Flag Link Fri Feb 14, 2014
In short it is a contract between and buyer and seller for a property that has to be approved buy the sellers mortgage lender. The reason is that the seller owes more on the property than it's currently worth and needs the lender to agree to the reduced sale price.
1 vote Thank Flag Link Fri Feb 14, 2014
Do you mean SHORT sale?? That is when the home owner owes more than what they can sell it for. Their lender (lienholder), basically gets "shorted" on what is owed to them and has to approve the sale.

Buying a short sale has its risks. It can take a long time for it to get approved, if at all. There can be additional liens on the property that can also cause more delays and more headaches. It's not uncommon for some of the lien holders to ask the BUYER to pay a higher amount in order to pay off some of those liens.

Make sure you have a Realtor representing you as a Buyer's Agent. And if you really want to buy a short sale, make sure that agent is experienced in those transactions.

Good luck!
1 vote Thank Flag Link Thu Feb 13, 2014
A short sale is when a home is being sold for less than what the current seller owes on the property & the seller does not have sufficient funds to bring to closing to cover the balance owed.

Pre-foreclosure is the time period beginning when the borrower stops paying his/her mortgage and ends when the property is foreclosed upon. This is the time period in which a short sale may occur. Once a borrower has missed at least 3 payments, the lender usually files a Lis Pendens with the clerk of court in which the property is located.

Homeowners often attempt to do a short sale in order to avoid foreclosure. Often the lender has filed a Lis Pendens and started the foreclosure process on the property. But not always.

To purchase a short sale requires patience. After you sign a purchase agreement with the owner of a short sale property, the seller's lender(s) and/or other lien holders have to approve of the sale before you can close. If there is just 1 lender, it may take up to 2 months to hear back from the seller's lender. If there's more than 1 lender, it can take 4 months or longer to hear from all lien holders. Sometimes a short sale has a tentative approval by the lender at a certain price, so the approval process may take less than 30 days.

You also need to have your financing in order before you submit an offer. Lenders like all cash offers. They will consider buyers obtaining mortgage if you are pre-approved with your lender (not just pre-qualified), the bigger your down payment the better, and your closing time should be flexible.

Contingencies are also important in getting a short sale offer approved. The less contingencies you include in the contract, the better. If you have to be closed and move out of another house/condo/apartment by a certain deadline, a short sale may not work for you.

It's also in your best interest to do a preliminary search of the clerk of court records on a short sale property you're interested in to see if there are multiple lien holders such as 2nd or 3rd mortgage, equity lines of credit, real estate tax liens, mechanic's liens, HOA liens, etc. The more liens there are, the less likely that contract will get to the closing table as ANY of the of the lien holders can stop the sale at any time by refusing to agree to a settlement.

If you find a short sale property that you like enough to write an offer on, you should have your agent ask the listing agent if the short-sale package is ready for submission to the leder and the status of negotiations with the lien holder(s). In other words, has the listing agent done his/her short sale homework.

You would make an offer in writing to the home owner, typically on an As Is (with right to inspect) contract form. The offer will include a Short Sale Addendum. Once the seller has accepted your offer, you are bound to that contract to purchase the home according to the terms written in the contract. Your short sale addendum will stipulate how long you the buyer are willing to wait for seller's lender(s) approval. It will also indicate whether the seller can keep the listing active in the MLS and continue to submit offers to his/her lender(s) under short sale approval is obtained. The contract is signed by you the buyer and the seller, not the lender(s). The lender(s) only approve of the contract.

The most common reasons why a short sale fails to close are:
incomplete short-sale package submitted to the lender(s)
short-sale package not submitted properly so sits in a pile on a desk
the offer is too low
the buyer's offer is not strong enough in terms of financing, terms or contingenties
the lender(s) took too long and the buyer backed out
the loan was sold to investors who won't approve the short sale
junior lien holders refuse to cooperate

It's very important if you are pursuing a short sale that your agent gather as much information as possible and disclosure as to the short-sale process by the listing agent up front so to help you determine the odds of that short sale transaction closing.

I know this is a lot of information to absorb, your agent should be able to sit down with you and go over the entire process until you are comfortable with it.

Regards,

Diane Christner, Realtor, GRI, SFR, CNE
Bright Realty
Sarasota, FL

http://www.DianeChristner.com
http://www.DianeChritner.info
0 votes Thank Flag Link Thu Nov 20, 2014
In a nutshell, the lender agrees to let the seller sell the property at the present market price if the borrower owes more then the value of the property. However, the ball is always in the lenders court when finalizing.
0 votes Thank Flag Link Thu Nov 20, 2014
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