What is a short sale?
Buying a Short Sale Home
What is a short sale? Buying a Short Sale Home means you buy a house for less then the seller's loan or the outstanding mortgage balance. As a result, the seller doesn't have to go though a foreclosure, the buyer picks up a property at a discount, and the lender avoids taking on the burden of unloading the property.
In a short sale the seller or the seller's agent makes arrangements with their mortgage lender to accept a price less than the mortgage balance.
Not all lenders will accept short sales it depends on many factors, such as:
the seller's credit and payment history with the bank
how the bank wants to manage the loss and their return on investment for their shareholders.
whether or not the bank feels they can get more if they foreclose
the experience of the personnel working on the deal
Some short sales are pre-approved by the lender, which generally makes buying a short sale home quicker and easier. Pre-approved deals are listed as such in the Multiple Listing Service (MLS) system and can happen fairly quickly as opposed to short sales that have not been pre-approved.
Buying a short sale home takes patience and the process differs slightly from buying a regular home.
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