well sure they can as long as they would get enough to pay off the mortgage and a second mortgage if they have one.

Mon Jul 7 2008, 04:27

Sarah

Just remember....the seller can make the INITIAL decision regarding accepting an offer. But it's the bank that makes the FINAL decision on whether or not the short sale will be approved. The bank can also override a seller's decision and choose another buyer that in the bank's perspective makes the more sound financial choice.

If the seller is having financial difficulty making his mortgage, there are options to choose from. I guess you can consider one of these as the first stage:
1) renegotiate the loan to get a better rate
2) reinstate the loan if the seller is delinquent
3) refinance if it makes sense

If the seller owes more than what he can sell the property, and if there are extenuating circumstances that can be documented as hardship, then the seller may qualify for a short sale.

So the second stage should be to apply and get qualified for the property to be sold as a short sale. That's when the seller should provide documentation that the lender requires to prove financial hardship.

Buyers can submit offers before a short sale is approved --- but nothing is going to happen until the lender approves the short sale. And approval can take 45 days or longer.

And if the seller sells the house before the short sale is approved, is the seller willing to shoulder the selling expenses? Is the seller able to come up with the short fall between what was owed and what he sells it for?

As a home buyer, what you should be cautious of are many:
1. Is the agent representing you experienced or knowledgeable about short sales?
2. Do you know what it takes to write a srtong offer? (preapproval letter, 1-3% initial deposit, strong terms, fewer or shorter contingencies, fewer demands, estimated HUD statement)
3, Are you willing to wait 45 days or longer just to get an answer --- accept, reject, or counteroffer?
4. Are you willing to compete with other buyers who recognize the same good deals that you find?
5. If your offer is accepted by the seller, but another offer is submitted that is better than yours, are you prepared to raise or make your offer better?
6. Are you preapproved? Lenders will look askance at borrowers with a weak situation --- after all, they're trying to fix a problem and aren't prepared to deal with another problem if the buyer can't qualify for a loan to complete the transaction
7. Will you stop looking at other properties once your offer is accepted by the seller but not by the lender?
8. The rate your lender quotes you is good for only a certain period of time. Are you prepared to lock in an interest rate? What if the rate goes lower than what you were quoted?
9. Do you have the patience when days, weeks go by without an update?
10. Will you take the time to understand the short sale process? It is a lot more involved than a regular sale, that's why it helps to have someone experienced in short sales to guide you along.

Good luck!

Mon Jul 7 2008, 01:08

Why don't you let me know the situation?

Sun Jul 6 2008, 22:35

can you tell me what to be cautious of?

Sun Jul 6 2008, 22:29

Stage prior to short sale is obtaining the bank approval, http://www.lynn911.com

Sun Jul 6 2008, 21:54

Hi Sarah:

A seller can find a buyer before short sale is approved. However, even though the seller agrees with the offer, he still has to get the approval from his lenders and make sure everything is in order so the buyer can receive clean title.

This is a pretty involved process. You might to proceed with extreme caution.

Sylvia

Sun Jul 6 2008, 21:42