What is a Short Sale?
In our current Boise Real Estate market we are seeing many homes being advertised as a “short sale” and many of you are probably wondering what this is all about. I work with many clients who are headed towards foreclosure and most of them don’t know that there are solutions out there. A short sale may be the solution to their problem; however, it’s important to know the facts. So here they are…
A short sale occurs when a lender agrees to accept less than payment in full for the loan due to a Seller’s inability to pay. You may be a candidate for short sales if; you have to sell fast, are not current on your loan and you owe more than the home’s market value. If this scenario sounds familiar then read further.
It’s important to know that getting a short sale approved with a lender is not an easy task. It is best handled by someone with experience in negotiations with the lender. Currently, lenders are experiencing a high volume in requests for a short sale. In order for them to accommodate such requests they expect Sellers to demonstrate the following basic criteria. Sellers must be able to provide proof of a hardship, financial insolvency, market pricing and market conditions.
The process of getting a short sale approval calls for a cooperative Seller. The Seller must be able and willing to provide much documentation to the lender. Things they may look for are bank statements, W2’s, paycheck stubs, monthly bills, letter and documentation of hardship. Keep in mind, however, that every lender is different and may have different policies and procedures.
In every real estate transaction there are several parties involved who have to work together to achieve a successful closing. Although, a short sale calls for a cooperative Seller, it also calls for a cooperative Buyer. Someone purchasing a home in which a short sale will need to be approved must realize that this is not a quick and easy process. Negotiations with the bank can take anywhere from 2 weeks to 2 months. This has been my experience. It’s also critical for Buyers to know that the Seller will be unable to give or receive money from the transaction. This means that the home must be sold “as is”.
You may have caught on that short sales can be long and complicated but it’s important to know that it’s a possible solution for someone headed towards an undesirable foreclosure!
Jillian Greer, Dan Frison's Advantage Real Estate Team, Keller Williams Realty Boise
