SHORT SALES - A SHORT Q & A

What’s a short sale?

          The seller cannot keep up with the mortgage payments. The amount the seller owes on the property is more than its market value and consequently will not sell at a price sufficient to cover the liens against the property.  The seller is likely in jeopardy of having the lender foreclose.

 

Why would a seller sell short?

          If an agreement is reached with the lender(s) to accept as full payment, an amount less than the actual amount owed, the seller may not suffer as severe negative effects on their credit report as might occur as a result of a foreclosure.

 

Why would a lender accept less than full payment?

          If the seller is no longer making payments to the lender, accepting an at market value amount, even if less than the actual amount owed, may cost the lender less than the fees associated with foreclosure and the negative impact of then trying to sell the property in a depressed market.

 

Why might a short sale be advantageous to a buyer?

          A buyer may be able to purchase a property at a price lower than market value.

 

What are some of the pitfalls of a short sale that a buyer may encounter?

          1. A short sale offer is subject to the lender’s approval.

The seller may not have pre approval that the lender would consider a short sale and/or the price that the lender might accept. 

          2. Multiple offers may be collected over an undetermined period of time.  The buyer might not be notified when and/or if the offer was rejected.

          3. A short sale only means that the property’s list price is less than the amount owed on the property.  This does not  mean that the price is less than the property’s market value.

          As always, a buyer should know the market and evaluate a short sale in the same way they would the value of any property.

 

          We can help you find and purchase the property you’re looking for at a fair, competitive price.  Together we will examine the data, ALL the relevant data, to make the best possible decisions regarding all aspects of your purchase.

 

                  If you would like more information about short sales please contact us.  We are here to help!   e-mail