As we have talked about before, Short Sales are becoming more popular with the selling of homes in todays market.  This happens when the homeowner owes more on the property than they can sell it for.  There are many reasons why a bank would accept a short sale.  Of course the banks want the homeowners to keep the home and keep making payments.  But if this can’t happen anymore the banks need to make a decision.  There are many reasons why a person can’t make the payments on a home.  There could be family illness or injury and the homeowners are spending their money on that instead.  There could also be a loss of job or decrease in income, especially if they have a commission based pay scale.  Another reason is that the homeowner had an adjustable rate mortgage and the payments are higher than they can afford.  They get behind a little one month and then can’t catch up.  If a bank is going to accept a short sale, the will need to see some reason why the homeowner can’t make the payments.  This is usually explained in a hardship letter written by the homeowner.

The banks might accept a short sale because they have a better chance of getting some of their money back.  If the home goes into forclosure, the banks will have to pay more fees and the process takes a lot longer.  The banks don’t want to have to take a short sale, but it might be a better option for them.

Because there is now a third party involved, the buyers of a short sale home need to be patient.  Most of the time a bank will have a loss-mitigation department that will deal with the short sales.  The banks don’t act quickly on these, so expect to be in for a long ride.  Be patient with the process and you could end up with a really good deal.

If you have any questions about Short Sales you can call Chad at 612-269-5260