What Is A Short Sale

Here’s the question that started coming in to us about two years ago as short so properties started to become more more prevalent. Their are a lot of common misconceptions about what a short sell it and how they occur.

First, let’s talk about what a short sale is not. A short sale is not a home that night needs to be sold in a short amount of time. It is not a home with a small amount of square footage, or a home that is short in stature. A short sale is when the owner of the property essentially owes more than what the property is worth and they are trying to get the bank take less than what is over the property when they sell it. This typically happens during these foreclosure process.

So in a short sell property negotiation, you are working with a buyer, seller, and a bank. Once an offer is accepted between a buyer and seller, it then has to be fully approved by the bank before the transaction can occur. Depending on the bank, this can be a very frustrating process. I have worked several short cells that take months to even hear back from the bank on whether they will approve the price or not. The seller also needs to prove that they are not able pay off the remaining balance because of market conditions or their financial stability.

With that being said, buyers of short sale properties can get a very good deal when they purchase one of these properties because the banks definitely do not want to take properties back through foreclosure. The foreclosure process just cost the banks too much to do. But, if they don’t get an acceptable offers through the short so process they will foreclose on the property and then try to re-list the house as a REO property. Also known as bank owned.

If you’re looking to purchase property and looking at short sales or foreclosures, make sure that you work with an agent that knows that market. Otherwise, you might be in for a long frustrating process.