Everyone has probably heard the term “Short Sale” in the last few years. You’d think that those kind of sales are commonplace, but that type of transaction is probably one of the toughest deals to put together if you want to buy or sell a home. Unlike a REO or bank owned property which is a property that has actually gone through foreclosure with the bank emerging as the actual owner, a property that is a short sale candidate is still owned by the homeowner. Typically the owners are behind on the house payments several months and foreclosure proceedings may or may not have begun. The chances of a transaction being successful on a Bank Owned home is a lot greater because you’re dealing directly with the owner.
The reason they are called a Short Sale is, for one reason or another, the amount that the sale of the home will bring on the market is “short” of what the Sellers owe to the lender. For that sale to work, the lender has to decide if they are willing to take less than what is owed so that they will release the current lien for the new sale to proceed. That’s not easy to get done. Every lender has their own policy about how to approach that and every home and sale has unique circumstances. Even if the lender decides that they would be willing to take less to get the property sold, the original home owners usually are required to pay back the difference, so they are not off the hook.
If someone wants to buy a home that is a possible short sale, they must be in a position where they can wait for the outcome and decision of the current lender. If it works great, if not, then it’s not critical. And they must be in a situation where they do not have to move by a certain date. So if this fits your situation and you found a home that you really want that’s a possible Short Sale and you are willing to step through the process to see if it works, then I’d say to go for it. Your wish might just come true.
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