BEFORE MAKING A SHORT SALE OFFER
What is a short sale?
The "short" answer is: The owner of the home owes more than the value of the house.
Different from Foreclosure this is a step a seller might make to prevent the bank from foreclosing. Answering these questions may help you determine if a short sale is good for you.
Are you patient?
Even after you come to an agreement with the seller, the lender (S) still have to approve the sale. It may take as long as 2 months to get approval from the bank. If the sellers has multiple loans against the property it can take longer.
Is your financing in order?
Lenders like cash offers but if you can't pay with cash it is important to show that you are well qualified. If you are pre-approved, have a large down payment and can close at anytime your offer is more favorable than that of a buyer whose financing is less secure.
Do you have contingencies?
Lenders like flexible terms. If you have to sell a home before you can close or if you need to be in your home by a certain date a short sale might not be for you.
Can you take rejection?
Even if a lender approves a short sale, it could require that the sellers sign a promissory note to repay the deficient amount of the loan, some sellers may not like that. Lenders also can change any of the terms of the contract you have negotiates.