Short Sales - A Buyer's Prospective

Intro to Short Sales
A short sale occurs when a property is sold for less than the amount owed on the mortgage and the lender agrees to accept that amount as satisfaction of the total amount owed to pay off the home loan. The lender determines if the seller is eligible to sell the home at less than the outstanding debt due to a hardship (divorce, unexpected hospitalization and medical expenses, job loss, death of a family member or a similar catastrophic situation). Additionally, a budget must show that the seller’s expenses exceed their income/assets, they are behind on their payments and there is no way to repay the lender. The risk with short sales is that the ultimate decision to sell the home lies in the lender’s hands. There are no guarantees in short sales.

Good News about Short Sales
Condition of home is generally better than a REO.
History of home is provided by seller in disclosures.
Generally only highest and best offers submitted to lender.

Not so Good News
Time. A buyer must be patient and not have any contingencies in regards to time.
No guarantee the lender will accept the home as a short sale.
The seller may not even qualify for a short sale if no legitimate hardship exists.
Short sales aren’t always a bargain - price set by listing agent.
Lenders will likely reject low offers. AND Lenders can change conditions after acceptance.
Lenders can raise buyer closing costs.
Loss of control of the transaction depending on professionalism of the listing agent.
Seller sometimes not motivated to sell.

A short sale is not for the faint at heart. But if you are patient and willing they can be a great option to get the home of your dreams - I can personally attest to that!!!