A short sale is when the house or property is sold for less than the balance due on the mortgage. The lender takes the loss, but not as much as a foreclosure process.
Short Sale homes are usually in some form of disrepair. If the owners could not make their mortgage payments, it is likely that they could not afford to keep up with maintenance either. You may have to spend a lot of money to make the home livable, so factor in the cost of repairs when considering the purchase price.
• A short sale is not short. It is a long process and it depends on how quickly the seller puts together the right papers, how it is provided and how quickly the lender reacts. There are many people in this situation, creating a backlog in the process.
• Lenders are notorious for not communicating quickly to approve short sales.
• If the home has liens, 2nd mortgages, or a home equity line of credit, each lender has be consulted for approval, which can take up a considerable amount of time.
There are no guarantees in a short sale whether the bank will approve the offer.
A short sale is a difficult process for both the seller and buyers. There are so many details involved (more than what the average homeowner is aware of). Make sure to consult professionals.
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