What is a short sale?

Asked by Ava Lewis, 32822 Sat Jan 5, 2008

I was on realtor.com looking at houses in my zip code and came across this.

MLS ID# S4625954

What exactly is a short sale?

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Ag, , USA, Mobile, AL
Sat Jan 5, 2008
It’s a pre foreclosure property, and in most cases the bank is taking a loss. Let’s say the seller’s loan is 200k but in the current market he can only sell it for 175k. The bank would consider a loss to avoid an actual foreclosure by taking a loss. That’s called a short sale. It takes more time and not all offers get accepted. But it’s possible to get a pretty good deal.
Web Reference:  http://troublehomes.com/
1 vote
Abby Nelson, Agent, Winter Park, FL
Thu Apr 12, 2012
My team has loads of experience with Short Sales, from listing to the closing, as well as purchasing.
We are more than happy to answer all your questions.
0 votes
Carolina Alf…, Agent, Celebration, FL
Fri Apr 6, 2012
I will like to invite you to a Free Informative Short Sale Seminar this coming Saturday 4/14/2012 from 2 to 4 pm at South Creek Library in Deerfield, address 1702 Deerfield Blvd Orlando Fl 32837.
There we are going to inform in deep, What is a short sale? myths and realities of a short sale, advantages and disadvantages for buyers and sellers. Everyone is invited!!! Just Rsvp to 407-494-3560
0 votes
Keshia "K" T…, Agent, Jacksonville Beach, FL
Wed Jul 29, 2009
We are looking for people like you. I am an investor and we have coined a process to shave off the weeks of waiting on short sales to be approved by the Lenders. Agents are overwhelmed with short sales and through all of their hard work and agony, the lender usually cuts their commission. We take that step away from the Agents. We do all of the leg work and as the Investor we are able to submit the paperwork to the lender to get it approved. No waiting and no price wars. Our strategy is to have a buyer lined up and have a flawless transaction. Let me know if you are looking for a home.
0 votes
Thomas Martin, , USA, Mobile, AL
Sun Jan 6, 2008
Short sale is when a buyer offers the bank less than what you owe on the mortgage.
0 votes
Ava Lewis, Home Buyer, 32822
Sun Jan 6, 2008
Thanks everyone. I have a clear understanding now.
0 votes
The Hagley G…, Agent, Pleasanton, CA
Sun Jan 6, 2008
You can also find more info about short sales at the link below:
0 votes
Jim Welden, Agent, Greenwood Village, CO
Sat Jan 5, 2008
Ava - you also need to be aware that with a short sale, the lender will examine the Seller's situation to first identify whether or not the Seller has the assets and/or income to repay the loan in its entirety - the only time the lender will even consider agreeing to the short sale is if they do not think the Seller can repay the loan. What does that mean to you as a Buyer? Well, you better have flexible living conditions right now because it may take the lender a week, a month, or even several months to respond to the offer.

In the meantime, the bank will gladly look at any other offers that come in from other potential Buyers that will result in a higher net amount coming to the bank. So, you could make an offer, wait several weeks and learn that another Buyer has submitted a better offer, or learn that the bank will not accept the short sale. Consequently, you want to make sure that the inspection and other dates in the offer do not occur until after you have acceptance of the contract by the lender or lenders if there are more than one.

For a home to even be considered a short sale, typically means that the current owner has missed one or more mortgage payments and that also means that there may be deferred maintenance on the property (for example, if there are multiple toilets in a home and one of them stops working, a Seller may forgo fixing the toilet (because there are other toilets) so they can at least pay the mortgage - when they can no longer pay the mortgage, then there may be multiple repairs throughout the home that have not been done).

I am not trying to scare you away from them because they may represent some of the best deals in the market, but you do need to be prepared that the process will probably not be as smooth as when there is a more typical Seller.
0 votes
Deysma C Ket…, , Orlando, FL
Sat Jan 5, 2008
A short sale is when you have an in vestment or a home which is an investment and the bank let you sell it short which means in a down ward market they will let you sell it for less then what you owe. depending on the hardship. sometimes they will forgive the debt as well.
Deysma Kettering
407 716 2044
please cal me if I may be of assistance!
0 votes
Greg Traub, Agent, Orlando, FL
Sat Jan 5, 2008
Quick clarification on Elvis's answer. When a home is listed as a short sale, the OWNER is attempting to sell the home for less than what is owed on the mortgage. The bank does not automatically approve the sale for less than what is owed and everything depends on the situation, the offer strength, and the property.

Typically a bank has the right incentive to accept most offers a buyer may make on the property. Keep in mind that your offer may not be accepted and it may take many days to even hear a yes, no, or counter from the bank. There are great deals to be had in short sale properties, but there are some different concerns when considering one.
Web Reference:  http://www.gregtraub.com
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