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What is a short sale, who qualifies for one, and how do they work?

by DeepakChuresh788 from Seattle, Washington. Feb 10th 2017 Reply


Tim Barlow (tim@cornerstonehomemortgage.com)
#113 ranked lender in Washington - 6 contributions

A short sale is when a person sells their home for lesser amount than the mortgage balance. This doesn't mean that the purchase price is a good price to buy it at, however you may obtain a good deal this way. Anyone can purchase a home that is on a short sale basis but the process can take a much longer time when you purchase a property that is a short sale. The reason is once the property has an offer made on it, the bank can come back and say NO that isn't enough and they can counter you and make you pay more for it. Some people shy away from these some people like these and are willing to make an offer and do the long wait that is required. My longest short sale was 10 months that it took to close. you can find them with your agent typically and with other private parties. If you have more questions, call me 360.250.3400 Tim@cornerstonehomemortgage.com

Feb 10th 2017
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Larry Gray (lgray_312_247)
#5 ranked lender in California - 1,127 contributions

Anyone who qualifies for a standard home purchase loan will qualify for the purchase of a home via an arranged short sale with the bank that possess the homeowner's loan. Obviously, the bank is accepting less than the mortgage loan owed so the homeowner is able to sell the home without incurring a debilitating debt that normally would still be due. With all the improperly handled by banks mortgage loan payment difficulties of many borrowers from the start of the recession of 2008 on...along with the many foreclosures or short sales...banks for the most part have a little better system to work with borrowers going through financial difficulties, and are more experienced at short sales. In short (no pun intended) short sales tend to be better handled now, and the average length of time between the offered price and acceptance is far faster than it once was, on average. Bottom line, if you really feel the home is the right one for you and you can get it for a fair price, you need not be discouraged that a short sale may take a little longer. I would definitely not just look for short sales to buy as I think I would be leaving out too many homes that could end up being better for us and a better value. Otherwise, I would certainly consider a short sale in my search for a home. We managed to stop in Seattle when it was snow covered enroute to Fairbanks, Ak. just a week ago. Very lovely from the air.

Feb 14th 2017
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William J Acres (William_Acres)
#2 ranked lender in Arizona - 7,797 contributions

A short sale is when a distressed homeowner can no longer afford to pay their mortgage payment, but they also owe more on the home then what it's worth.. the lender allows the homeowner to sell the home for LESS than what is owed (reduced payoff) rather than foreclosing.. Statistically, lenders recoup on average 20% more when they allow for a short sale rather than foreclosing.. (2014 stats).. so it's a win/win for both the homeowner and the lender.. If you are considering a short sale on a property you own, then you should contact a local real estate agent who is familiar with the short sale process and they should be able to help you through the entire process. Typically, it's best to get approved by your lender in advance so there's no surprises.. The lender will require you provide pay stubs, bank statements and tax returns as well as supporting documentation proving your other monthly obligations.. Also, you must "Qualify" for a short sale.. you will have to prove you have suffered a hardship and that you can no longer afford the payments.. Understand that not everyone who applies for a short sale actually get's approved.. Several years back, homeowners were doing a "Strategic" short sale or "buy-and-bail" where they had good credit, and could afford the payments, but decided it was best to get rid of the home they were $200K underwater in and buy the same home down the street for that much less. Lenders caught on to this really quick and instituted guidelines to identify these abuser's, so it's not a problem any more.. I'm a preferred Lender with Arizona and California being my primary markets. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com NMLS# 226347 / RPM Mortgage NMLS 1541014 / AZMB0121893

Feb 15th 2017
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