Short Sales

What’s a Potential Short Sale?

A potential short sale is a real estate purchase agreement which is subject to all the seller’s lenders and lien holders approving the purchase price, terms of the contract and the settlement statement.  Approval is needed because the total amount owed to everyone involved exceeds the purchase price.  Any seller should seek knowledgeable counsel and an experienced agent. The banks usually require a lot of information. Constant contact is necessary to insure that the file is progressing with all the Banks and other lien holders.  I recommend that the seller contact an attorney before accepting any offer.  Language can be added to the offer which may make negotiations easier with all concerned. Care needs to be spent on the deficiency with the lenders and the tax consequences of any debt forgiveness.  Getting an approval from everyone can take a long time.  There are a lot of variables involved. An experienced agent and attorney make a huge difference.
If I am representing the Buyer, I try to explain the entire process.  I caution the Buyer that one of the lienholders may not approve the transaction.  The Buyer may not get the property at all.  A back-up offer may be approved instead.  Sometimes a foreclosure is filed at the same time, and the property is auctioned at the courthouse before the short sale is approved.  Any buyer should seek an experienced agent and attorney.