SHORT SALE. It Doesn’t Really Mean the Process is Short.
We often hear that the process of selling/buying a home can be a long and tedious process. This can sometimes deter us from wanting to buy a home among other reasons. However behold, the SHORT SALE! Well this can only mean what it says, that it will take only a short amount of time to go through the buying process. Sadly enough, that is NOT what it means at all.
What Does ‘Short Sale’ really mean?
A short sale usually means that the seller is upside-down on his or her mortgage and is attempting to negotiate a deal with the lender in the hope of avoiding foreclosure. In this type of sale, the bank (lender) agrees to accept less than the amount owed on the mortgage. The reasoning behind the bank accepting a short sale deal is so that the seller can be relieved of a lien on the property. Homeowners prefer this as an option even though they owe more than the home is worth.
Short sales are not to be confused with a foreclosed home. A home under foreclosure is the result of the homeowner no longer paying their mortgage and the bank is taking back the property. When a house is listed as a short sale, the bank has the last say in whether an offer is accepted or not. The offer must cover the balance left on the house as well as all associated costs and commission with purchasing the home.
It takes a lot of time and patience when dealing with a short sale. It is very important that your realtor state to you, the buyer, that the home that you are viewing is a short sale.
As the buyer, you should always get pre-qualified for a home purchase or any major purchase so that you know what you can and can not afford. The same applies with a short sale, some lien holders will insist that the purchaser show proof of pre-qualification before approving your offer. It makes plenty of sense to do this for all involved. The last thing anyone wants to do is waste valuable time negotiating back and forth for a home and at the end, you are unable to afford the home.
When buying a short sale or placing your home under short sale, be sure to understand the process and ask many questions as you go along.
Article courtesy of Military Relocator
