What is a Short Sale?
A short sale is when a seller, with the banks approval, sells their home for less then what is owed. A seller still has control over their home until the short sale is final and can continue to live in the property, however it is the banks decision on whether or not they will accept the short pay off. Banks in most cases will not accept a short sale payoff if the seller is being current on their payment. In many cases sellers have to be at least 1 payment behind before their lender will acknowledge a short pay off.
Short sales will affect a home owners credit, but not as badly as a foreclosure. An individual that does a short sale can, in most cases, purchase a home again with in 3 years with an adequate down payment. Sellers do have to cooperate in a short sale by providing personal information to their real estate agent that is not normally asked for in a standard sale.
If the home is a sellers primary residence, the monies lost on the property are usually forgiven due to the mortgage tax relief debt bill. Sellers also need to maintain their property during the short sale process. Short sales are getting faster these days, although it can sometimes take up to 6 months to complete a short sale. Currently the time frame of a short sale from the time an offer is received to when it closes is about 8-10 weeks, depending on the bank. All banks are different and there is no set rule for short sales.
If a seller chooses to do a short sale, they should pick an agent who has experience in doing a short sale. Just like any other realty transaction an agent can make or break the deal. Contact me with your short sale questions.
- Trina, 579-9400