What Is A Short Sale?
A Short Sale occurs when a homeowner owes more on their property than the property is actually worth, but their bank agrees to accept less than what is owed as payment-in-full. In other words, the bank is willing to take a discounted pay-off in order to avoid the foreclosure process.
Why Are Banks Willing To Do A Short Sale?
Banks are willing to do Short Sales because the alternative is foreclosure, and the foreclosure process is usually far more costly than the discount the bank takes on a Short Sale.
What Are The Benefits For The Homeowner In A Short Sale?
The primary benefit to a homeowner who participates in a Short Sale is avoiding the devastating effects of a foreclosure to their credit. If the loan is VA guaranteed, the successful completion of the Short Sale protects their VA eligibility for future VA mortgage loans.
What Are The Benefits For The Buyers In A Short Sale?
The benefit to a buyer when purchasing a short sale is that the property might be available for purchase under current market value.
What Are The Drawbacks For The Buyer In A Short Sale?
This type of sale requires that the seller’s lender approve the sale. This process can often times be lengthy. There is no guarantee that the seller’s lender will accept your offer. This type of sale takes a great amount of patience by all parties.
What Is The Process For A Short Sale Transaction.
· Seller accepts your offer and then submits it along with other required documents to their lender for approval.
· The lender may counter your offer or accept it as written. (The length of this process varies by lender and depends on the ability of the listing agent to provide the correct documents. This could be 2-4 months.)
· Once the offer is accepted by the lender we will conduct our inspections and proceed.
If this type of property is of interest to you, please let me know so that I can provide more in-depth information.