"What is a Short Sale" is something my clients ask all the time. They can be experienced buyers or first time home buyers - but they all want to know "what is a short sale"? Being involved in a short sale is not something that happens to everyone. Because this is a new concept for most people we have to carefully explain..."what is a short sale"!
For a buyer, "what is a Short Sale" is anything but short. The short sale process can take 6 to 8 months - or longer! The one thing about shorts sales that we can absolutely guarantee is that there are no guarantees!
The most important information for the buyer regarding short sales is that the deal may never close. The seller is trying to beat the foreclosure and bring an offer to the bank. The bank is trying to get the most out of the deal, which may involve a promissory note or cash brought by the seller to closing. If the bank asks the seller for cash to close, the seller may decline and allow the bank to foreclose on the property causing the deal to fall apart. The buyer starts over and the process continues. That answers a lot of the "what is a short sale" for the buyer.
Answering the question "what is a short sale" from the seller's perspective involves not only a definition of the short sale, but information about what this will cost the seller. I have been on listing appointments when sellers tell me that they have talked to other agents that want to charge them upwards of $1000 to list their short sale and asked them to sign an agreement to pay the agent any reduction in commission taken by the bank! I make sure to let my sellers know that this short sale process is at no cost to them. I do not charge to list their home and my commission is paid by the bank.
So, what is a short sale for a seller? It is working with professionals under the direction of an attorney to list their home, find a buyer and present the offer to the bank. It is asking the bank to accept the offer as payment in full and to put in writing, that the seller is unconditionally released from the mortgage and the note. Without this release, the bank can sue the seller for the difference owed even after the closing takes place. Often, the bank agrees to accept the short sale but refuses to accept the offer as satisfaction of all money owed.
As an agent, make sure your clients understand the process. As them..."what is a short sale" and make sure they know what to expect!
That is the long and short answer to the "what is a short sale" question. For additional information and links to HUD, visit my website www.Shortsale-Help-4U.com
Maureen Legac, SFR
Keller Williams Lakewood Ranch