What to Expect with a Short Sale Deal
First, "What is a short sale?"
A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency. This definition courtesy of Wikipedia.
What should the seller expect?
The seller should be expected to disclosure all financial information to the lender, even items that don't pertain to the home. The sellers must prove to the lender that there has been some sort of 'hardship' to warrant the short sale (i.e. medical problems, job loss) The seller needs to work diligently to get the lender all requested information as quickly as possible. Sellers should keep an open line of communication with the lender. The seller should expect and be prepared to negotiate with the lender on the deficiency amount.
What should the buyer expect?
The buyer should find their inner patience, there is nothing 'short' about this buying process. The buyer should expect to make their highest and best offer because most sellers list the home at a lower price to entice multiple offers and quicker sales. The price the home may be listed for sale is not always an 'approved' short sale price and still has to be approved by the lender or the third party as you will see written. The buyer should expect to purchase the property as is, but always budget to have the property inspected so you will know of any problems you might be buying. Buyers should keep the end in mind and remember they are purchasing a home at below market value, most of the time. It may take a little longer, but the reward can be great.
Whether it's a short sale, resale or new construction Caroline Ashe can help with your next move to and from or around the Augusta, GA area! Call her today! 706-589-1360
