What is a Short Sale?
“What’s A Short Sale?” It means that the price that is currently presented as the listing price is actually less than the amount that the seller owes to the bank. This means that when a buyer submits an offer, the seller and the seller’s agent have to present that offer (along with a pretty intense financial package regarding the seller’s current situation) to the bank. The current lien holder (the bank) will then review the entire package and give a response to the offer.
Typically the houses that are listed as short sales denote that in the marketing remarks. “THIS IS A SHORT SALE~BUYER MUST USE SPECIAL SALE CONTRACT, FORM 2176 RIDER & HAVE PRE-APVL LETTER~ALLOW 2 MONTHS TO CLOSE~CITY INSPECTION BY BUYER” Other times, the fact that it is a short sale is only disclosed in the Agent Remarks.
From the buyer’s perspective negotiating a short sale can be a very trying experience. Typically on a residential sale, a buyer submits an offer and hears a response from the seller within 24 hours. On a short sale, however, it could take several weeks to hear back from the lender. Occasionally (and preferably) there are times when the seller or seller’s agent has contacted the bank and prepared all the required documentation in preparation for a contract. In those cases, responses come a lot quicker. However, more often then not, the banks won’t really take part in the process until there is an offer to be considered.
Patience pays in short sale transaction.