Ccb10, Home Buyer in Lehigh Acres, FL

what is a short sale?

Asked by Ccb10, Lehigh Acres, FL Thu Dec 16, 2010

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Short Sales A short sale describes the sale of a property by a financially insolvent homeowner who is facing foreclosure for less than the value of the outstanding loan. If a homeowner is interested in pursuing a short sale with their lender they will need to have the lender's consent and approval.
• Lender's consent and approval required.
• The lender accepts the sale as payment in full for the loan.
• The property owner escapes foreclosure, but receives no funds from the sale
• There can be no equity in the property
• Seller cannot bring money to the closing.
• Lender does not report foreclosure to the credit bureaus.
The lender will require various documentation. The incentive for the lender is to remove the account from their books before the loan becomes a problem. It can also cost a lender $25,000 to as much as $50,000 in order to send the property through the foreclosure process. Technical requirements for a short sale: (May differ from lender to lender)
• Owner must demonstrate hardship/financial insolvency (i.e. loss of employment, illness, divorce, catastrophic illness, death of a spouse).
• Seller must prepare a hardship letter asking lender to accept short sale.
Documentation that may be required by lender to determine if owner qualifies for a short sale.
• Listing agreement with Realtor showing the property is on the market for sale.
• Comparable market analysis which includes sales and listings
• Bank statements
• Pay stubs
• Tax returns
• Purchase/Sale Agreement
There are drawbacks to the short sale.
• A deficiency balance could be charged off which could result in negative credit bureau reporting.
• If the cancelled portion of debt exceeds a certain amount, the homeowner is required to report the forgiven amount as income on his or her tax return.
As always, any property owner should seek legal and financial advice before entering into this type of transaction.
If you would like more information on Short Sales, please contact me.
Tammy Hayes, Realtor, Sandals Realty, Punta Gorda, FL 941-276-6185 tammyhayesre@gmail.com
0 votes Thank Flag Link Mon Dec 20, 2010
A short sale occurs when the seller needs to sell but the value of the home is less than the money that they owe on the mortgage. They are selling "short" of the mortgage.


jessemcgreevy@gmail.com
239-898-5329
http://www.Bonita-Estero-RealEstate.com
0 votes Thank Flag Link Fri Dec 17, 2010
Short Sales are SHORT ON MONEY (i.e. the bank accepts less than the current owners owe to the bank on their loan) and Short Sales are usually LONG ON TIME.....
You need to connect with an experienced Short Sale Realtor who is advising you in the right way, and prepares you for what can happen along the process...

Good Luck to you!
Edith YourRealtor4Life and Chicago and Northshore Connection
Working always in the very BEST interest of her clients
EdithSellsHomes@gmail.com
0 votes Thank Flag Link Fri Dec 17, 2010
Ccb10,
What a great question. The answer is very simple.

When a house is for sale and the proceeds from the sale will NOT pay off the mortgage, is is "Short".

Therefore, it is known as a short sale.

To a home buyer this means that you will still have a purchase and sales contract like on any home. However, now the seller is removed from the approval process and the bank is in charge. Plan on waiting 120 days for an answer. The actual number of days can be less or it could be more, NOT EVERY BUYER is suited to buy a short sale. Some Can Not wait that long.

Note: All sales...a normal buyer to seller, a short sale or a bank owned sale ALL need to be at fair market value and guess what...the whole market is on SALE!!! Who does not love a sale.

Best of luck to you.

Debbie Albert, PA
Keller Williams of the Treasure Coast
Web Reference: http://www.ronanddebbie.net
0 votes Thank Flag Link Fri Dec 17, 2010
Great question! I get this question so frequently I posted an article on the subject a short time ago. Click the link below to view the blog article.

http://dlang2.featuredblog.com/?p=3

David Lang
Keller Williams Realty
0 votes Thank Flag Link Fri Dec 17, 2010
You may find the following articles helpful:

"What Every Buyer Should Know About Short Sales"
http://www.trulia.com/blog/lyle_wolf/2010/08/what_every_buye…

"The 4 Foreclosure Related Real Estate Opportunities"
http://www.trulia.com/blog/lyle_wolf/2010/11/the_4_foreclosu…
0 votes Thank Flag Link Fri Dec 17, 2010
Depedning if you are buyimng or selling, the approach to a short sale should be extremely different. The basic premise is the seller owes more than the house is worth, they are then asking the bank to reduce what they owe so they can sell the house at or just below market value. The seller must have a financial hardship to be able to qualify for a short sale.

As a buyer, you want to make sure you have a buyer broker who is expereinced in short ales to guide you through the process. As a seller you would want a listing agent experienced in short sales and proven they can get them done.

Please see my blog with tips and advice on how to get a short sale approved and tips for buying them
0 votes Thank Flag Link Fri Dec 17, 2010
Ccb10,

There really is no mystic about a short sale which is simply the sale of a property in which the sale price is lower than the amount due on the loan, or loans, taken against it. These contracts are always contingent on the lender, or lenders, approval and can be frustrating and time consuming. This process can be better for both the seller and the bank; the seller avoids foreclosure which causes severe damage to their credit standing and future ability to borrow and the bank avoids the expense of foreclosure.

One thing to watch out for is the short sale does not necessarily release the borrower from the obligation to pay the note so it is important that they seek a release for future deficiency judgements.

I hope this information is helpful but if I can offer anything additional please feel free to contact me at your convenience.


Always at Your Service,


Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
tom@tompriester.com
Web Reference: http://www.tompriester.com
0 votes Thank Flag Link Fri Dec 17, 2010
Ccb10:

This article will explain short-sales, foreclosures and traditional sales.
http://www.trulia.com/blog/antonio_vega-pacheco/2009/12/fore…

Tony Vega
Charles Rutenberg Realty
0 votes Thank Flag Link Thu Dec 16, 2010
A short sale is a sale of a home where the proceeds from the sale may not be enough to pay off the lien owed on the home. Normally a short begins after the owner has defaulted on their loan and decides to short sale. In most cases the lender will give the seller different options such as: died in lieu, a loan modification (if anyone reads my blogs, please email me if you succeeded with a modification) another option is the short sale of the property. In most cases home sellers will opt the short sale option. I think the number one reason people may consider a short sale is due the fact they owe more on the home than what its worth.

Keep in mind when you short your home the short sale agreement does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency

Ainsley Daux
LIc. Realtor
Home Run Real Estate
anzly123@yahoo.com
http://ainsleydaux.topseller.net
http://www.homerunrealestate.com
shortsale101-ainsleyblogspot.com
0 votes Thank Flag Link Thu Dec 16, 2010
A short sale is where the seller's lender agrees to accept less than what is owed as a short payoff. Short sales should really be called long sales due to the fact they can take several months to complete. Not every seller is qualified for one & there are other factors such as second mortgages, association fees, assessments, liens, mortgage insurance etc that also have to agree if they've placed a lien on the property.

Short sales can be very good deals but if patience isn't a virtue you possess they may not be for you.

If I can answer any other questions feel free to contact me.

Have a great night!
0 votes Thank Flag Link Thu Dec 16, 2010
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