What is a short sale?

A) The term “Short Sale” is used to refer to those real estate transactions in which the agreed-upon purchase price is insufficient to pay off all of the secured debt on the property (such as mortgages, trust deeds, state/federal income taxes, liens, property taxes or other local assessments) including the costs of closing, such as escrow and recording fees, title insurance premiums, real estate commissions, etc.

The payoff is “short”.

 How easy is it to buy a short sale?

A) There are several issues regarding buying a short sale. First the offers are always contingent on the bank giving approval. We call this “third party approval”. This consent can be slow in coming and if the buyer wants to wait they must understand that there is a risk. They could expend their funds only to later learn that the necessary creditor’s consent to the short sale cannot be obtained. They could lose their lock during this time also and there is always a chance that there may be additional offers that come in, while waiting for the “approval”. Unlike other offers the property usually stays on the market during this waiting period.

What are the Benefits of a real estate short sale for the seller?

A) The seller benefits from a short sale in that it prevents a foreclosure on their credit history. Typically, a short sale is quicker than a foreclosure and less costly, and the homeowner may find it less stressful. The borrower is also able to get out from under a debt that is no longer manageable. In most cases, the negative consequences are relatively short lived. Many homeowners are able to purchase another home within two to three years if they have a short sale on their credit history. Negative credit consequences for foreclosure last up to seven years.

Why Windermere is better at short sales?

We have invested in a program that works with the top decision makers at the banks. Instead of being put in line with hundreds of others, waiting for this paper and that information, we put together an extensive package that is sent directly to the loss mitigator so we can have an answer as quick as possible.

Remember!

Short sales raise important issues, including income tax implications, liability issues for unpaid indebtedness, credit rating issues, bankruptcy issues, legal issues and a range of others. Your real estate broker is not an expert in these areas. Both buyers and sellers are strongly encouraged to secure additional competent professional advice before entering into a short sale transaction.