You've got the jist from the answers below so I won't be redundant. The first step is you have to "convince" the bank of a hardship. Simply saying I want out because it's not worth what I paid for it won't work. This is best done by writing a letter about a hardship. Be factual and passionate and don't be surprised if your asked over an over again for the hardship letter. It's always in your best interest to work with a realtor with an SFR designation. SFR= Shortsale, Foreclosure Resource. This means your agent has at least been through trainign on how to navigate the shortsale process. I'd also interview agents to make sure they have experience in short sales.
I see you have received some great information on short sales. Hope your questions were answered. If you need more information about Arlington Heights we have sold many homes in that neighborhood and would love to chat with you. If you would like to look at values in the neighborhood send me an email. email@example.com
Short sales are those transactions in which the seller requests that the bank accept an amount less than the full amount owed them....
Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
A short sale is a sale in which the Sellers owe more money to their lender than the amount that they can sell the house for in the current market.
This means the Sellers will come up "short" when they pay off their mortgage. Because of this, the Sellers' lender will need to approve any sales contract on the home, since the lender will be agreeing to accept less than the amount owed.
As you can imagine, short sales are very common these days, since real estate values have dropped in the past few years, since the "boom" ended. I hope that explains things.
Maggie Hawk, REALTOR
Watson Realty Corp.
The seller lists the property at current market value. When they accept an offer, they take the offer to the lender and ask the lender to approve the offer. If the bank chooses to accept the offer, the lender will take the amount the house sold for and forgive the difference that is owed.
For example: The seller has a $300,000 mortgage. They sell the house for $275,000. The bank gets the $275,000 and forgives the remaining $25,000 that is owed to them.
There is a little more to it then this but that's the jist. The seller needs ot be in a financial hardship position, can not have any other assets and can not receive any money or gains from the sale.
For a buyer, any offer accepted by the seller is subject to bank approval. However, all negotiations are done though the seller not with the bank. It can take months to get a response and buyers should be prepared for a long process. Usually the property is sold as-is, no credits for repairs and in some cases the buyer may be responsible for some costs needed in order to close