A "short sale" is a distress sale in which the lender agree to take less than the amount owed on the home's mortgage, so it can avoid the costs of a foreclosure. The home owner is either behind in payments, or possibly the home is "upside down", meaning the homeowner owes more than the house is currently worth, based upon current Real Estate Market conditions. There are some instances where the homeowner owes 2 times what the house is worth.
In order for the house to be sold, the bank would have to take a loss. The bank has to weigh the loss they would experience in a completed foreclosure (REO) versus the loss they would experience if they agree to the sale right now. Also, a large part of the decision making process is the financial status of the home owner. The bank has to determine if the homeowner is really in extreme financial difficulty.
The time frame in getting a shortsale approved depends on the bank as well as the stage that the shortsale is in. A bank sends an appraiser to the property in order to determine the value of the property, usually when the bank receives an offer. If the value of the home and the offer work in the crunching of the bank's numbers, then the bank will probably approve the shortsale or at least counter the buyer for a higher number.
With the high number or preforeclosures that the banks are dealing with the process can take a long time. It can take 2-4 months to find out if you have a deal or not. However, if the specific bank has a streamlined process or the bank has recently determined value, it can take a matter of weeks instead to get an answer on an offer that you make to purchase the home.
Right now, Fannie Mae is conducting a pilot program that should speed up the shortsale process. There are some homes in our Tampa Bay market that are included in this pilot. If the pilot program goes well, this may revolutionize foreclosures and the Florida Real Estate Market. This is great news.
Shortsales -- It's a great way to get a home at a great price, but Buyers need to be patient. It is a test of patience, but you can get a great house at a terrific price. Years from now, you may be very glad that you were patient in your offer to buy a shortsale. Home prices right now at such low levels, low interest rates - a great time to be a buyer!!
Please let me know if you have any interest in purchasing distressed properties in the Tampa Bay area - preforeclosures, shortsales, bank owned properties or REOs. Also, there are a LOT of just "Regular" sales at deep discounted prices.
Buyer Incentives available to my buyers! My Services are always FREE to Buyers!!
Warmly,
Stephanie LeFew
Tampa REOs for a quick response to your offer
813-624-3332
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