Buying or Selling a Short Sale

Have you ever heard  Realtors complain about short sales?  There is endless paperwork, they take forever, no one at the bank returns their calls or answers their emails – the list goes on and on.

So, why do I love short sales?  Because in my work, there is no more satisfying way to help a seller out of a distressed situation while helping a buyer find a really great house.  Short sales are a win-win situation for both the seller and buyer.

For the Seller:

  1. Yes, there is some paperwork.  You will be asked to furnish tax returns, bank statements, pay stubs, as well as a financial worksheet and a letter explaining your financial hardship.
  2. In a short sale, a seller does not take away any money at closing; nor does he have to bring any money to the closing (unless negotiated with his lender).  If someone asks you to pay in advance to help you with a short sale, don’t do it.  It is most likely a scam!

For the Buyer:

  1. Your purchase and sale agreement is negotiated between you and the seller, but will be subject to the seller’s lender approving the reduced pay-off.  The time it takes for the seller’s lender (or lenders) to approve the short sale can take between 2-3 weeks and 9 months or more!  If you need to be into a new home immediately, then a short sale may not be a good idea.
  2. It is important to work with a Realtor who understands the short sale process.  You want to be certain that once accepted, your offer will be the only offer presented to the bank.

In summary:  For a seller who wants or needs to sell and owes more on his home than it is worth, a short sale is almost always the best solution.  Quite often, the seller is able to negotiate total debt forgiveness on the unpaid portion of his loan.

For a buyer who has a flexible time schedule, purchasing a home offered as a short sale can offer a great value and instant equity.

For more information on Short Sales vs Foreclosures, please visit my website.

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