Home Buying in New Dorp>Question Details

Madhavi Yala…, Home Buyer in Staten Island, NY

what short sale means?

Asked by Madhavi Yalamanchi, Staten Island, NY Tue Apr 24, 2012

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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, etc., therefore much patience is oftentimes necessary...
1 vote Thank Flag Link Tue Apr 24, 2012
Excellent explanation Irina. Short sales are not for everyone, the time frame involved can be torture for an anxious buyer. There are certain parameters that your agent should be able to ascertain which will make it more or less likely to go through.
1 vote Thank Flag Link Tue Apr 24, 2012
Short sale is when the owner owes more for the property than the property is worth in the current market. To sell as a short sale, the 3rd party (the short sale lender and all other lien holders) has to agree to accept the lower price (current market price). Also, the seller has to have a true hardship, in order to qualify. Short sales take from 2 months to 3 years, depending on motivation of the seller, what banks are involved, if the realtors are experienced with short sales...

Example: Seller bought property in 2005 for 500K. Now, the property is worth 270K, and the seller has been unemployed for the past 2 years, and no chance of employment. You, as buyer, offer 260K, the bank sends in a realtor to do a bpo (broker price opinion), the bpo comes in at 265K - you are in the ball park of the underlying investor, your short sale is approved. If bpo comes in at 280K, the bank may conter with the price higher than your offer of 260K.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
IrinaKaran@gmail.com
1 vote Thank Flag Link Tue Apr 24, 2012
It's a good idea to have a buyer's broker representing you. Also, remember that a short sale can last for several months or longer
0 votes Thank Flag Link Wed Apr 25, 2012
A short sale is an opportunity for a buyer too buy a property that is upside down .This means that the bank has a current mortgage that is not being paid and they are willing to sell the house for its current market value.
0 votes Thank Flag Link Tue Apr 24, 2012
Good definition Erin. However, with all the politics involved it can last longer than a normal sale.
0 votes Thank Flag Link Tue Apr 24, 2012
Madhavi: A short sale means that the property is selling for less than what is owed to the lender. In a short sale, the lender has to approve a buyer's offer before the property can go under contract and move towards a closing.
0 votes Thank Flag Link Tue Apr 24, 2012
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