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People ask us all the time: What’s a short sale?

Short sales are one of the many avenues being taken by homeowners grappling with the negative effects of the recent economic changes. The term often shares space on lists with foreclosures, loan modifications, REOs and deeds in lieu.
In simple terms if a homeowner owes the bank more money than they can sell their house for, the bank may still agree to a sale. The net proceeds of that sale will be short of what the homeowner owes. In many cases the lender will forgive this unpaid balance making it a good option for a homeowner looking to move forward.

From a Buyer’s perspective a short sale can be appealing for many reasons: among them are that the owners still live in and take care of the property, also, short sales are another source of potential properties in a market with limited inventory.

In our current market a downside of purchasing a short sale is that they tend to take a much longer time to process than a standard sale or a bank owned property, aka REOs.  With a short sale the Seller still owns the property but the bank has to approve the purchase price which in essence defines the amount lost.  Asset managers are the individuals at the bank who process this approval. For the most part they have high case loads and are plagued by changing rules, market uncertainty and the difficulty of getting secondary and tertiary mortgage or lien holders to agree to the sale.  A few banks have put short sale streamlining programs in place but not all situations are conducive to streamlining.  A net effect is that there are short sales taking 4 -6 months to close.  Right now it is normal for a standard escrow with a loan to close in 45 days.  You’ve got questions – we’ve got answers.

For more information about short sales, contact Heather & Learka
Heather & Learka, Teles Properties
424-202-3208
heatherandlearka@telesproperties.com