A short sale is when a real estate property owner with a legitimate hardship sells their property for less than what is owed on their mortgage(s) thus avoiding foreclosure, bankruptcy and other credit rating issues because of a real estate related debt.
Considered by many an almost unheard of term a few years ago, short sales have actually been around for decades and typically spring up during economic downturns or in unique individual cases for owners of real estate. Real estate short sales have again sprung to the forefront of the current market with banks and lenders increasingly doing short sales.
There are two main types of short sale properties. Approved and unapproved. The difference is very straightforward. Approved short sales are when the bank not only allows the short sale to take place but has negotiated with the property owner a price that is agreeable to the lender. In most cases this “approved” will take into consideration the local market conditions surrounding the property.
Unapproved short sales are when the seller of real estate advises the bank that they are going to sell for less than loan value but the bank has not come to an agreement on a price or final settlement value. These sales require a little more investigation on the part of the purchaser and also a hefty dose of patience. For the seller it means the final price can still be changed by the lender during the process.
The problem inherent to most short sales is that the process to achieving a successful short sale is very different from a traditional normal real estate sale. Most agents don’t know what the banks want or defer to others in the hope of getting by. Follow up by traditional agents has also not been what is necessary. The Lenders representative can change many times during a short sale transaction. Proper valuation of real estate assets takes on a very important role as well. In brief, short sales require a different view of the traditional sales transaction. To be sure, it is a sale of real estate from a willing seller to a ready and willing buyer but there are additional steps and considerations. This is why most short sales take too long and why buyers lose interest.
Where do we fit in? We are Certified Distressed Property Experts (CDPE). We are members of the Distressed Property Institute and our sole focus is to help you get back on your feet by dealing with this current market condition armed with the right information, the right documentation and the right approach. We are part of a national network of persons equipped for your specific needs. We constantly monitor this evolving process on a national level keeping a close eye on how lending institutions standards change; integrating what works and avoiding the pitfalls. We monitor the government’s response and work with local institutions assisting in helping people through their time of need.
For this reason we employ a multistep process for each client insuring that they properly qualify as short sales candidates with their lenders and then guide them through the steps to a successful short sale.
We look forward to helping you through this process.
