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
  • market conditions
  • 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.

    Read more about What is a short sale?

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