With todays real estate market and decling house prices in some areas, many buyers or people interested in real estate are hearing and talking about short sales.  Sometimes it is not clear exactly what a short sale is.  Many people know what a forclosure is, but not a short sale.  A short sale is when the proceeds of a home sale do not cover what is owed on the home.  This may sound hard to understand, but many people who bought homes 2 to 4 years ago at the top of the market also were able to get loans at zero percent down.  And now that home prices have not gone up, or in some cases have gone down it is nearly impossible to sell the home and actually break even.  The seller also needs to pay real estate comissions, escrow and title fees to close the deal.  In a short sale the proceeds of the home cannot cover all of the fees and the mortgage payoff, so they sell the home in a short sale.

In a short sale the bank needs to approve all sales, mainly because they are agreeing to take less than what it owed.  Because the bank is now involved in the process it can take a lot longer to get an answer to see if your offer was accepted.  But if you are patient,  the buyers can sometimes get a great deal on a home.

If you have any other questions about short sales or the short sale process you can call Chad at 612-269-5260.