With all that is happening in the world of real estate, there are plenty of opportunities for sellers to avoid foreclosure, and savvy investors to scoop up a real find for a fraction of what a property may have cost just five years ago.  You may be wondering what your options are to get out from under a mortgage you can’t afford.  Or you could be priming yourself to purchase a home in this market.  Either way, you need to know what opportunities are out there, and what it all means for you!

Short sales are increasingly becoming a popular alternative to foreclosures.   Before approaching a property that is designated as a short sale or considering putting your home into short sale, let me answer some of the most frequently asked questions.

1. What is a short sale?

When a borrower owes more on their property than it is actually worth, the borrower has the opportunity to enter into negotiations with their mortgage company (or companies) to accept an offer on the property that is less than the full balance of their loan or loans.  The lender must approve the sale and in most cases would prefer a short sale to avoid the costly and lengthy foreclosure process.   In this case when a buyer closes on the property it is considered a short sale.

2.  Does a short sale property take longer to close than a traditional sale?

It can.  Awaiting the final acceptance of the offer from the mortgage company could take up to 90 days.  The seller should accept one offer and then that offer, and only that offer should be submitted to the bank.  Submitting more than one offer to the bank can create delays.  Keep in mind there are no guarantees that the offer submitted will be accepted. 

3. Do you qualify for a short sale?

Qualifying for a short sale includes any or all of the following: