Anatomy of a Short Sale

A short sale is the selling of property to avoid foreclosure, the catch being that the property is being sold for less than the amount owed on it.  What makes a short sale tricky is that the sale price is not up to the seller, the lender has to agree to the purchase price.  The home owner isn’t walking away with any money at closing in the case of a short sale so he doesn’t care if the home sells for a dollar, the bank’s involvement is to reduce their loss as much as possible and the buyer just wants a bargain.

The basic process of a short sale is:

• Borrower must be in arrears on loan payments
• Borrower or broker contacts lender to discuss the possibility of a short sale
• Potential buyer makes offer, knowing what is owed by borrower/owner of property
• Lender reviews loan and offer
• Borrower has to show/prove financial hardship
• Lender and broker discuss value and condition of property and examine any offers
• Lender makes final call

We sometimes have short sales available as investment properties -

The short sale process looks easy on paper, follow the steps and the deal is done, short sale completed.  However, in reality the communication between the borrower, lender, Realtor and potential buyer is complex and time consuming.  Simply wanting a short sale won’t make it happen.  Using a CDPE (Certified Distressed Property Expert) eases the pain and insures you better success when trying to complete a short sale.  Being in financial stress is not easy on anyone and using an expert will help you get the job accomplished in a more timely manner and help create a successful real estate transaction.