The homeowner is behind on their mortgage payments. There could be many reasons: loss of a job, bankruptcy, medical bills, etc. In today’s world he/she often can’t afford to sell the home because the home’s value is less than the mortgage payoff.
So, said homeowner goes to the lender and asks permission to sell the home for an amount that will not fulfill the payoff amount. The bank has to agree to this, since the bank will be taking a loss once the home is sold.
The good/bad for sellers are they can get out of a bad financial situation, but they will have a definite drop in their credit score. The bank wins because they get most of their money and do not have to foreclose and take over ownership of the property. A home buyer wins by buying a home that has a great selling price.
There are several things a savvy home buyer needs to know about a short sale:
- The property is sold ‘as-is’- any repairs or problems becomes the buyer’s future headache.
- These transactions are often long and delayed. Anticipate a roller-coaster ride to closing.
- While the seller’s bank has agreed to consider a short sale, this is frequently only a verbal discussion and there’s no guarantee the bank will agree to your price. (See number #2 above.) Check to see if the seller/lender has completed their short sale process and things are in writing.
- If there are two mortgages involved (and possibly two lenders), double the issues/process times two.
Since the flood of short sale homes (that started in 2009) has abated, many kinks have been worked out and the process has become smoother. Talk to your Columbus Team Realtor and lender, who can offer further advice and details to assure a smooth transaction.
Sellers: need to know more about the short sale process? Follow that link and call the Columbus Team today at 614.888.6100. We’re experts at handling home sales that are ‘short of funds’ in today’s market! It’s in your best interest to work with a real estate agent who has extensive experience with short sales.