All of the proceeds of a short sale go to the lender. The lender then has two options—to forgive the remaining balance or to pursue a deficiency judgment that requires the former homeowner to pay the lender all or part of the difference. In some states, this difference in price must be forgiven.
The actual time frame for a short sale can vary a lot. The time to close depends on where you live. It could be way longer if multiple lenders are involved. And 60-90 days is just an average, meaning by definition that some take less time and others more.
Learn seven risks of a short sale so you can plan properly and decide if it could be the right investment for you.Long Process. ... Subject to the Mortgage Lender's Approval. ... Lender Could Counter, Reject or Not Respond. ... Opportunity Cost. ... Property 'As Is' ... Is the Seller Approved? ... Lenders Prefer All Cash or Large Down Payments.
7 steps to easily negotiating the purchase of a short sale propertyCommunicate and Set Expectations.Gauge the Market.Advise About Lowball Offers.Know that Short Sales Are More Attractive When You Have a Cash Buyer.Once You Make the Offer, Be Patient.Remember That You're Negotiating With the Lender.Be Resolute.
To accomplish a short sale, a trader borrows stock on margin for a specified time and sells it when either the price is reached or the time period expires. Short sales are considered a risky trading strategy because they limit gains even as they magnify losses. They are also accompanied by regulatory risks.
Even when the buyer and the seller have both signed the paperwork -- indicating a binding contract -- only about 40 percent of short sales ever close at all.
Short sales are a mixed bag for the buyer, the seller and the lender. If you're a seller, a short sale is likely to damage your credit — but not as badly as a foreclosure. You'll also walk away from your home without a penny from the deal, making it difficult for you to find and pay for another place to live.
It costs more to the lender to go through the foreclosure process. During a short sale, the lender shares the cost with the homeowner to quickly sell the home. From a financial standpoint, many lenders prefer a short sale if the home is not expected to sell for more than the balance due at the foreclosure auction.
The lender agrees to accept the sale proceeds and release the lien on the property. The proceeds of the sale pay off a portion of the amount owed. Short sales are one way for borrowers to avoid foreclosure.
A short sale negotiator works on behalf of a seller to reach a short sale approval with a bank or other lender. The individual's job is to persuade the lender to agree to accept less than the debt owed on the mortgage in order to allow the short sale to occur.
Are Short Sale Home Prices Negotiable? Short sale home prices are negotiable, but not in the same way as the sale price in a traditional purchase is. As the seller, you may be motivated to get rid of the property—but the mortgage lender must ultimately decide whether to accept an offer.
Since a multitude of different parties must cooperate to get a transaction completed (buyer and seller, both sets of realtors, creditors, escrow company, insurance company, the lender, the broker AND the bank finally) it may be necessary to have everything completed BEFORE the bank signs off on it, allowing it to be ...