What is a short sale?

A Short Sale transaction occurs when there is a declining market and personal financial conditions force a property owner to sell their property for less than what is owed on the mortgage and the lender agrees to accept less than full amount.


How does the Lender decide to complete a short sale? (Seller)

The process used to determine potential and acceptable losses. Most lenders now have Loss Mitigation Departments that will approve or deny a short sale.

The lender will consider the following:
1. Is the owner facing a financial hardship?
2. Is the current value less than what is owed on the property?



Is it too late to help?

If your property has already been foreclosed, it is too late to help. The best way to find out if we can complete a short sale is to speak with one of our financial analysts to determine if you qualify and how much time you have to complete the transaction.


How much will a property sell for?

The lender will conduct an Appraisal or BPO, and The agent will provide current market data to demonstrate to the lender the true value of the property. When a contract is submitted to the lender we also submit all marketing data to support the offered price.


What are the benefits of a short sale?

The seller benefits by not having to face foreclosure or having as harsh a credit rating consequence. No funds would be received at closing. The buyer benefits by getting a great value on a new property purchase and the lender benefits by cutting its loss earlier and does not have to incur additional legal fees and other expenses.


What will it cost for a lender to foreclosure?

A typical foreclosure costs the lender over $50,000 in legal fees. The lender also has to pay property taxes, insurance, repairs, maintenance, brokerage fees and closing cost to sell an REO.


Why would a lender accept a short sale?

The lender will clear a non-performing asset faster and lower its reserve requirements. The Federal government is encouraging lenders to approve more short sales. Also, recent studies show lenders lost 40% of the loan by foreclosing versus a 20% loss in a short sale. Loss percentages in both categories will increase as market values continue to decline.



How Can I Increase The Odds Of Closing A Short Sale?

As a seller you can increase your odds of closing a short sale and avoiding foreclosure by working with a team of professions that are trained in these situations. You should also remain a part of the process throughout the transaction and communicate with your Realtor and Financial processor to provide them with all financial support material, so they can provide the bank with a full package.


How long will it take to complete a short sale?

A short sale transaction can take as little as 30 days and as long as 6 months depending on the lender and the time it takes to obtain a contract from a ready willing and able buyer.