A Short sale means the buyer is offering the seller an amount that will not pay off the loan at closing. The bank will come up "short". Some call the home upside down.

For a short sale to occur, the bank has to agree on the short sale, usually before it is listed. The price that the short sale is listed in our area are generally pretty good. The banks cannot afford to have a non performing loan on their books. There are other conditions that must be met by the seller for a short sale to occur but you come into the picture once that is competed and they are on the market.

The seller signs the offer but then the bank has a negotiator that counters and negotiates details. The seller's agent works with the bank and should keep your  agent in the loop.  Banks are not obligated to match the pace of the negotiations to the dates you and your agent put on the contract, but you are bound to them... creating a potentially stress filled situation for you.

Negotiations: Banks do not negotiate like sellers. They tend to stick closely to their asking price, especially when the listing is new. Most banks price according to market because having a non performing loan is very expensive to them. A trick I use is to come back AFTER they reject the first offer with another...not taking no for an answer.

Time to Close: On a similar note, short sales generally take LONGER than normal contracts... from 2 months to a year. Lately, we have seen about 90 days on some of the better organized banks.

Response time: In a normal contract, there are dates that need to be attended to in order to stay under contract. When doing a short sale contract, the bank is not obligated to those dates. If the bank negotiator for this property is swamped, you may not hear back for a week.

Accepting a better offer early in the negotiation process but after a seller has signed. Banks have been known to be open to other signed offers even when one is on the table. As a CDPE (certified distressed property expert), I never send in other offers when an accepted one is on their table but other agents do so be sure to have your agent ask the seller's agent if they do that or not. That can add another layer of stress.

Avoid STRESS...which comes with the territory in short sales.

Continue to search for a home during the short sale process so that in case the negotiation is not successful you have not wasted your time for nothing. Have a good back up in mind.

If time is an issue for you (new job, etc.) DO NOT DO A SHORT SALE. The bank is not obligated to the closing date on the contract and it generally takes longer.

Not all agents like doing short sales and many do not have the expertise in keeping negotiations going. Find an agent who understands the process and knows how to put together a packet that works for the bank.  And, you definitely want a buyer's agent... someone to protect YOUR best interest in the process.

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We hope this helps. Call with questions 719.221.6108.

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