what is a short sale?

Asked by Ronee Lyles, Phelan, CA Mon Aug 22, 2011

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10
Kevin and Ju…, Agent, Wildomar, CA
Tue Jan 31, 2012
Ronee - A Short Sale is simply a sale of a property where the mortgage lien holder (BofA, Wells Fargo, etc...) agree to a sales price that is short of what they are owed.

Check http://www.ShortSaleNow4Free.com for more info
2 votes
Rudy McDowell, Mortgage Broker Or Lender, Bloomfield Hills, MI
Wed Aug 24, 2011
Hi Ronee. Gary answer is fairly spot on. To add: If you do a short sale you will not be eligbile for a new mortgage for a minimum of 3 years from the date the property goes to sheriff sale. Use to be from the day after your redemption period ended and the property officially belonged solely to the bank.

Now, if you're short selling due to job loss, relocation or divorce, then some lenders may allow you to be eligible immediately (as in the case of a job relocation to another city or state---and so long as you were current on your mortgage up until the home sold), or wait up to 12-24 months, as it may be for the cases of job loss or divorce. VA only makes you wait 12 months in cases of the latter.
1 vote
Gary Geer, Agent, Antioch, IL
Mon Aug 22, 2011
Ronee,
A short sale is when a lender accepts less that what they are owed on an existing mortgage with a home seller. Sellers will have to prove a hardship and all offers the seller may get for the home are subject to acceptance of the sellers lender. Their may be other complications such as other lenders who also have an interest in the property . Some good examples are a second mortgage or home equity loan.

All the best,
Gary Geer

http://www.GaryGeer.com
1 vote
Nikki R Agui…, Agent, Murrieta, CA
Mon Jan 9, 2012
Hi Ronee,

I recommend that you talk to someone when you get a chance to get all the information regarding your situation. There is a lot more to understand that simply what it means. Every situation is unique, and no 200 word answer will be enough to really understand what it means, the process or the implications of a short sale.

Not just any agent will do. You need someone who has experience not only with short sales, but also with your bank. Every bank has their own process and procedures as well. If an agent tells you that it is all pretty much the same, they are mistaken. If they say it can take 3-4 months that is an average, and may not necessarily be true. Some smaller banks have been know to approve shorts sales in a couple of weeks time, and the house is sold 30 days later. Some take longer. You want to be prepared.

Again, it is a process to get answer to all the questions. This being the first. Good luck, and as mentioned here - stay in communication with your banks.
0 votes
Linda S. Cef…, Agent, Franklin, WI
Wed Aug 24, 2011
George,

I agree with much of what you said in the link in your post. However, I do not think it is fair to blame the agents. While I never did, nor would I ever tell a client they must be late on their payment in order to be accepted for a short sale, there was a time when the banks themselves were telling that to my clients.

And as always a seller should try for a loan modification first, number one.

Above all, if you are an agent willing to do short sales, it is imperative that you in continually educating yourself on the new laws, rules and programs.
0 votes
Linda S. Cef…, Agent, Franklin, WI
Wed Aug 24, 2011
Rudy?

I am confused. If you are successful in your short sale then there is no sheriff's sale.
0 votes
George Raymo…, Mortgage Broker Or Lender, Fort Worth, TX
Tue Aug 23, 2011
If you are considering doing a short sale, I would encourage you to know upfront the cause and effect of your decision. Please read my article so you can avoid the most common mistakes that most homeowners made by not contacting a lender in advance and listen only to their real estate agents.

http://www.trulia.com/blog/george_raymondo/2011/04/can_i_buy…

Best of Luck!
Web Reference:  http://www.AFN-Loans.com
0 votes
Scott Godzyk, Agent, Manchester, NH
Mon Aug 22, 2011
Simply put Ronee a short sale is when the seller owes more than the house is worth and the sellers bank lowers what they owe in order to allow teh sale to take place.

http://www.trulia.com/blog/scott_godzyk/2010/10/so_you_want_…

please see my blog with a full list of tips and advice on buying a short sale..
Web Reference:  http://www.ScottSellsNH.com
0 votes
Anna M Brocco, Agent, Williston Park, NY
Mon Aug 22, 2011
A short sale occurs when an owner has proven hardship to the lender, and can sell for less than owed on the mortgage; the owner can accept whatever offer he/she wishes, but the lender decides to accept, reject or possibly counteroffer. Short sales are by no means fast sales and much will depend on the number of liens, the lender and who is negotiating the sale.
0 votes
Linda S. Cef…, Agent, Franklin, WI
Mon Aug 22, 2011
In the simplest terms, the seller has endured some type of hardship and can no longer afford their home. They are requesting that the bank accept less than what they own on their loan via a completed sale.

If you are in fact a buyer, you will want to make sure that you have an experience agent helping you through this process. They will know what questions to ask the listing agent regarding the short sale. It is important that the listing agent has knowledge of short sales and how to process them and your agent should be able to determine that by researching that agent and talking with them.

Short sales can take a long time to get to closing, so be prepared to wait. Some can close quickly, but there is no way to tell up front which ones will take longer. If you are currently a renter and on a lease, you may want to talk to your landlord about going to month-to-month to avoid breaking your lease.

I am not an attorney and this should not be construed as legal advice.

Hope this helps.
0 votes
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