I’m commonly asked “what is a short sale?
Buyers sometimes assume the “short” means “quick”. It is the exact opposite of quick.
I have 9+ years of experience in purchasing a short sale personally and assisting buyers in purchasing a short sale. Even with experience in the process, it was still an emotional rollercoaster for my purchase. Nothing is what it seems, common sense goes out the window, the parties have little control over the lienholders.
Let’s go back to what is a short sale?
The short answer is: The Seller is short the funds to close on the property.
OR The Seller owes more than the property is worth and doesn’t have the money.
What is a lienholder?
A lienholder is a business that has put a lien on the house due to money owed on the house.
This could be a 1st or 2nd mortgage or more.
Sometimes a Contractor, HVAC Company, Window Company, and others.
Can any Seller sell their property for less than they owe?
No- they cannot. The Seller has to meet a means test to show they don’t have the means to pay off the difference in the house. It’s the same process qualifying for a short sale as it is a buyer qualifying for a home loan.
Can a buyer make a low ball offer on a Short Sale?
Yes and a Seller an accept but keeping in mind, the lienholder(s) still need to get involved. The best way a Real estate agent can help their Seller get approval is to list the home at market value and decrease over time. The bank in the first position is going to ask for an appraisal or Brokers Price Option on the property and if that comes in higher, the lienholder will counter. I’ve found this step typically takes place 2-3 months after the offer is accepted.
What is a short sale negotiator?
Short sale negotiators are key in getting things done quickly. Negotiators can be Realestate agents, Attorneys or a person licensed to negotiate a short sale. Touches have to be made with the primary lienholder daily. It’s important to make sure the negotiator has experience.
How long does it take to close on a short sale?
In my experience (and each short sale is different), it can take 6-9 months+. It helps if the short sale has been approved and price approved with the lienholder prior to listing or an offer is accepted.
Like to learn more about my experience with a short sale. Give me a call 253-380-1915
Blue Summit Realty