When a homes value is less that the amount owed on a mortgage, and the home owner is late making
payments on the mortgage, the bank will begin a forclosure process. If the home owner wishes to save
his credit rating and avoid the forclosure, a real estate agent is hired to market the home for sale. Since
the homes market value is less than the amount due on the mortgage, the agent begins a short sale
process. Most often we need to stop the forclosure process so we price the home below market value to
attract attention which in turn leads to offers on the property. Once an offer is accepted by the home
owner the bank reviews the offer and either accepts the offer or sends a new approved price which is
higher. In the event the approved price is higher the agent relists the home at the new approved price
and sells the home at this price. Sometimes the approved price set by the bank is higher than the real
market value this sometimes causes the home to not sell and the bank ends up forclosing on the home.
This short sale process takes anywhere from 2-6 months. In other words short sales are very uncertain
and can waste a lot of your time. In my experience you are better off looking for a home that is a
regular sale, or a bank owned sale. Unless this home is absolutely the one you really love then I would
say you should spend the time in the short sale so you can aquire this home.
