Short Sale Homes

The owner is in pre-foreclosure status. They are in default on their loan and are attempting to avoid foreclosure by quickly selling the property. A lender might agree to the Short Sale if they deem it to be less expensive than continuing with a costly foreclosure process. They might also determine that there is no guarantee the property can be sold at a public auction or REO sale for more than what is being offered.

The owner needs to move, but they owe more than the current market value of their home. They might have financial hardship, need to re-locate, or have other pressing reasons why they need to sell their home. The lender might agree to Short Sale the home for the current market value if they determine it to be less costly than foreclosing.

• Generally the seller is very motivated to sell the home.
  
• There are some great deals to be had when buying a Short Sale.
  
• You usually have time to inspect the property and research the title.

• The short sale process is complicated and often very lengthy. Few transactions close within 30 days. Most take longer than 90 days to close.
  
• Both the seller and their lender need to agree to the transaction. The lenders move slowly and have the final say in whether or not to accept an offer.
  
• Once the lender agrees, they can still reserve the right to market the short sale property throughout the transaction and accept a higher offer at any time. So, you can get all the way through the lengthy process, jump through all the hoops, plan your move, make all of the necessary preparations for when you finally close, and the purchase can still fall through at any time.
  
• A seller’s second mortgage lender can wreck havoc on the process, even after the primary lender agrees to the Short Sale. While these lenders are supposed to be last to collect loan payoffs, they can kill a Short Sale if they decide that they are not getting enough out of it.
  
• Bidding wars can drive up the price of a short sale property. Sometimes prices are driven higher than market value which obviously eliminates the benefit.
  
• Lenders often demand that buyers submit an offer with an “AS-IS” clause in order to limit their liability. This means that the buyer assumes the risk of the short sale property condition. While buyers can inspect the property, they might miss something. Repairs will be their responsibility alone.