Short sales are becoming more common throughout the real estate market creating frustration and confusion in the process

As more and more homeowners find themselves unable to sell their homes for what they owe on them or unable to make the their monthly payments, many are turning to real estate short sales.  Real estate short sales allow a homeowner to sell their home for less than they owe on the loan.

Thoughts on Short Sales:

•  In practice short sales are a practical transaction for both the bank and the homeowner. On the down side the bank will not receive the full amount owed on the real estate loan.  On the up side banks will not incur the costs involved with a foreclosure.  Homeowners normally prefer a short sale because it is less damaging, than a foreclosure, to their credit score.

•  Many real estate professionals experience reluctance, on the part of banks, to approve short sales. Many times banks will let properties go into foreclosure, even when they have been offered a fair price on the property. In addition to considering the price, most lenders also take into consideration whether the homeowner can demonstrate financial hardship. If the homeowner is capable of making payments, many lenders will try to work out a loan modification, rather than a short sale.

•  Unlike foreclosed properties, which may be run-down and vacant for many months, short-sell properties are likely to be better maintained, as most owners may still live in the home.

•  Short sales often are more time intensive than traditional transactions and often require additional paperwork. Due to the large number of offers on short sales, many take as long as a few months to receive approval. If information or required forms are missing or incomplete, the bank may set the offer aside, which could delay the process and cause the property to go into foreclosure. To expedite the process, sellers should work closely with their REALTOR® to provide all of the necessary paperwork

•  Working with a REALTOR® who has experience with short sales can help both sellers and home buyers during the transaction. A seasoned REALTOR® will be able to serve as the mediator between the seller and the lender, and lead to a successful transaction.

•  It is important to remember that in a short sale, although the seller may be anxious about selling the property and willing to accept any offer, it is ultimately up to the lender to determine if and at what price the property can be sold. Home buyers should work closely with their REALTOR® to submit realistic offers.

For more information read: Short Sales

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