A short sale is the sale of a property for less than what the owner still owes on the mortgage. This is often used when a homeowner needs to sell and can no longer make the mortgage payments but would like to avoid going through a foreclosure. Lenders with sometimes agree to short sales because they believe that it get net them more money than going forward with a lengthy and costly foreclosure process.
This type of real estate transaction is extremely complicated, and because of that, the help of an experienced real estate broker is required. If you get your heart set on a short sale property, know that the process can be lengthy and frustrating. The agent and seller set the asking price; however, the bank has the final say in what is an acceptable offer. If you would like to submit an offer, have your real estate agent pull up comparables in the area to see what a reasonable offer would be. A lowball offer will get a slow or no response at all.
One other thing you should be aware of in short sales is that if there are home improvements to be made, don’t expect to them to be done. These sales usually come “as-is.” The buyer must take the responsibility of fixing anything that is broken.
In summary, if you’re looking for a quick transaction with not too much hassle, a short sale is not for you. These transactions are complicated and time consuming and there’s usually not much, if any room for negotiation. The advantage to going through this process is that there are bargains to be found shopping for a short sale. The other reason is that the buyer completely falls in love with the property. If you do decide to go through this process, make sure you have a knowledgeable real estate expert on your side to help you navigate.