There are many things to consider when facing the possibility of foreclosure and deciding to short sale your property. Time and space to not allow me to get into every aspect of these transactions and all the possible nuances that might need to be dealt with, but I will do my best to cover, what I feel, are the most costly to over look. First let me say that I DO think short sales are great and do a lot of good for people who know they are their best option. I do these for people everyday and I’ve seen people’s lives get A LOT better afterward so the purpose of this article is NOT to paint short sale in a bad light, but rather to inform you of the whole picture some people in my industry WON’T tell you. Lets get to the point… You NEED to know whether a short sale is your best option: First off, you need to know whether doing a short sale is right for YOUR situation. You NEED to asses the situation YOU’RE in and make that decision. So how do you do that? Start by realizing that for the most part short sales help people the most if they CAN’T make their mortgage payments anymore due to a long term hardship. Long term doesn’t mean 20 years or anything, but at least 9 months. For instance getting injured and losing employment for an extended period of time, illness, divorce, etc are reasons most lenders will be ready to approve as a hardship.

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In recent years the terms “short sale” and “foreclosure” have become buzz words amongst realtors, investors, and the public. It is very important to know the difference between the two when searching and considering putting an offer on these types of properties. Just simply knowing the difference can assist you in many ways of the process further helping you become successful in purchasing the property. A short sale is when a lender agrees to take less than what is owed on a property. This can be a longer than expected process in most cases. It is important that you understand the short sale process before placing an offer so you do not waste your own time. First thing to remember is that the bank does not own a short sale. The bank is only a lien holder of the property and the seller is still the seller in the transaction. This is the most common mistake when making an offer to a seller on a short sale. The seller remains the seller of the property until the title of the property is transferred via foreclosure. Many people tend to think that all offers must be presented to the bank when they must be presented to seller only. If the property does get taken back through means of foreclosure then it will become bank owned.
A seller has the ultimate decision on what offers the bank sees since they still remain the seller of the property. Believe it or not, but if you find yourself in negotiations with a seller in this situation and the bank counters your offer they technically do not have the power to do so since they are not the seller. The bank is countering the payoff or net amount they will be receiving once they the short sale is closed. While this happens all the time just keep in mind that the bank is only approving a payoff to the property. If conducted correctly this process should take between 60-110 days depending on what banks are involved and who is conducting the process.

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