WHAT IS A SHORT SALE?

A. SHORT SALE

A short sale is a situation in which the real estate seller owes more money on the  loan(s) secured by the real estate than the sale of the property will likely produce  on the market.  The seller is in a distressed situation, but the bank/lender has not  yet taken title from the seller through the foreclosure process.  At this point, there  might be a window of opportunity for the seller to put the real estate on the  market and try to sell it in order to at least partially satisfy the sender who holds  the mortgage.

B. THE SHORT SALE PROCESS:

The process begins when a seller signs a contract with a buyer for the purchase of  the property.  The seller’s attorney submits the contract, along with a large  volume of personal financial information to the lender for review.  The attorney  also submits to the lender a closing statement showing the costs of sale and the  net proceeds available to satisfy the loan.  The lender then orders an appraisal to determine the current value of the property.  The seller’s attorney then negotiates  for approval of the sale by the lender.

C. BE PATIENT:

Because of the large volume of documents and slow turnaround from lenders  reviewing a high volume of short sale requests, short sale negotiations usually  take several months to complete. 

D. FORECLOSURES vs. SHORT SALES:

Not all short sales are homes in foreclosure.  Many homeowners who are current  on their payments, but who are forced to sell for personal reasons are short simply  because homes have depreciated in many areas.  Homes being offered for short  sale that are in foreclosure must complete the short sale before the foreclosure  auction occurs.