Question Details

LS, Home Buyer in Dallas, TX

In lament terms- short sale?

Asked by LS, Dallas, TX Thu Jan 17, 2008

Can someone explain to me in lament terms what a short sale is and why it takes sooooo long to get a response after you submit in an offer? The weird thing is this- for first time home buyers like myself - the name itseld SHORT sale sounds like it would be faster but I guess the SHORT part may be referring to what the bank gets as a result.

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In layman's (not lament--that's what a seller does when he realizes he needs to go the short sale route) terms, a short sale is when the lender agrees to accept less than what is owed on a property. House has a $500,000 mortgage but is only worth $400,000. A buyer offers $400,000. The bank is "short" $100,000 if it agrees to the short sale. The term for a fast sale would be a "quick" sale, which generally does not describe a short sale...nor is a quick sale like the oft-mistermed "quick claim deed," which is actually a quit claim deed. Oh, those pesky, confusing terms!
1 vote Thank Flag Link Thu Jan 17, 2008
Don Tepper, Real Estate Pro in Burke, VA
The reason is takes so long is that in most cases the manager working your file is overworked (too many files). The other reason is that the mortgage was sold to an investor, and that investor must approve the short sale, so there are quite a hurdles that must be overcome.
sorry the delay. be patient.
0 votes Thank Flag Link Fri Jan 18, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
No one ever mentions that banks refuse to sell "short" when the owner has extra assets. Oh well, the time they take is for 2 fold:
1. During that time they expect you to get nervous and drop a higher offer (happens all the time to first timers)
2. to verify that the owner doesn't have any assets to take when they agree to take less than owed
0 votes Thank Flag Link Thu Jan 17, 2008
Ive bought 2 short sale homes in the past, and the reason it takes so long, is you are dealing with the realtor, the owner, the Negotiator for the bank, and finally the bankers who approve the the final price. It takes weeks for a bank to approve a short sale amount, because of all the channels your offer must follow. Then if you get a counter from the bank, the process starts all over, and could take months if neither party agrees to an offer. Short sales are more of pain than anything, and by the time the bank does accept an offer, especially in this market, the price has already dropped more, and you could end up spending more while you were trying to get a better deal.
0 votes Thank Flag Link Thu Jan 17, 2008
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