Short Sale? What's THAT? (Short Answer)
Some houses are sold below what is owed on a mortgage. Sometimes there is more than one mortgage, like a 2nd mortgage(equity line). Usually, on the second mortgage, the lender will have to be willing to take little of nothing. It is a bit more difficult to get bank approval if the mortgages are at separate banks.
When an offer is made by a buyer for a short sale it may be accepted by the seller, but then it has to be approved by the lender(s). This may take 30-45 days or more.
The buyer may be required to provide bank approval, earnest money, commitment letter and a HUD(settlement statement w/ title search prepared by a real estate attorney). It just depends on what the bank asks for.
All sellers need to have their documents ready to submit to lenders if they are listed as a short sale and they recieve an offer. The seller will need to provide the past 2 years tax returns, last 2 pay stubs, bank statement, hardship letter and other supporting documents that the bank requests.
Even after all this... it may not be approved. The lender may send back a counteroffer. Or it could just be rejected. The wait may all be worth it in the end because you will close on a house priced below appraisal value.
During this time it can be stressful on all parties. There are a lot of unknown factors that the listing agent must deal with. It's just not business as usual.
Please take note that I am not a short sale expert. My comments are only based from my personal experience with short sales. Not all transactions will be the same.
It's just a part of the real estate landscape that we will all have to see for awhile. On a good note... I have seen a lot of action with buyers and sellers this week.
Things are getting better in Central Kentucky!
Hey, I even saw gas at $1.49!
Lizette Fitzpatrick- Baby Boomer Real Estate Relocation Specialist with Prudential Don Foster in Richmond, Kentucky.
#1 featured Kentucky Realtor on Activerain.com and Localism.com. Publisher/Author for the only Central Kentucky email newsletter on local real estate listings and sold properties, Kentucky relocation, local events, homeowner information and fun!
For more information on Lizette, Kentucky Horse Farms, Prudential Don Foster, Madison County, Fayette County, Richmond or Lexington, Kentucky click on Lizette.us.
See for yourself what Lizette's extraordinary clients have to say about their Kentucky real estate experience. Copyright © 2008 By Lizette Fitzpatrick, All Rights Reserved..*Short Sale? What's That?*