What is a short sale, and what are the benefits to a buyer/seller?
A short sale is when the owner of the home is "shorting" the bank, paying them less money than is currently owed on the home and "settling for less than owed". A seller can benefit from a short sale because they are able to get out from under a home that is worth more than owed. A buyer can benefit from a short sale because they may be able to get an extrodinary deal on a great home.
The way a short sale typically functions is as follows...
A seller will put their home on the market for market value, typically less than owed. Once a purchase agreement has been received the seller then contacts the bank and notifies them of buyers offer and starts the negotiation process. The process can take anywhere from 2-4 months, with little communication from the bank. The process for the seller is very similar to when they purchased the home: all financial details must be divulged, why a short sale is being requested (banks are unlikely to grant a short sale if the seller has assets, or a hardship is not present), as well as the current hardship, if any, the sellers are experiencing.
For the buyer this process is very trying. You've put an offer on a home, and everything is contingent on the bank approving the sale. All their is to do is wait.
The Joe&Joe Team has the opportunity to help several homeowners through the short sale process- two of them never missed a payment! Another great resourse that was just made available to us is a "Short Sale Department" within our office. The short sale department has an investor willing to make very low-ball offers on these homes at the beginning of the listing period. The purpose is not to steal a house, but to move the process along prior to receiving an offer from a buyer. When an offer is received from a buyer we will be that much further along in the negotiation process with the bank.
For help with a short sale, or to see if you qualify please contact us.
Posted by Stephanie Shinabery, Service Manager for Joe & Joe
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