Many people may wonder what a short sale exactly is.  Select Foreclosure Source Magazine answers this question:

“A short sale is a property that is still owned by the seller and in most cases still occupied by the seller.  As a result of the market or economy the seller needs to sell but the property is worth less than what is owned to the bank.  In order to avoid the cost of the foreclosure process and allow the owner to preserve some of their credit rating the bank allows the seller to offer the home at or below the current market price.  The bank will take all of the sale proceeds to the purchase as forgiveness for the debt.  This is called selling the property short.

 The upside of a short sale is that you are getting a home that is in pretty good condition but sometimes may need to repair or deferred maintenance that in most cases you can move right into.  This is a home that you can buy at or close to foreclosure prices.

 The downside is that this process takes time.  The seller accepts the offer but the bank has to approve it.  As a result of the large volume of short sales it can take 60 to 90 days to get bank approval and another 30 to close.  Like the foreclosure the seller and the bank rarely pay for inspections or repairs so you need to budget for them.  If you have time on your hands this is a great deal but the process is a little tricky so look for assistance with your real estate agent, they will walk you through it.

Filed under: SHORT SALES