Short Sales - Q&A

Many people have asked me about short sales lately, so I thought I would put together a quick Q&A:



Q. What is a short sale?



A. A transaction where the proceeds are insufficient to cover all costs and liens.



Q. Can any Seller do a short sale?



A. No. You must prove financial need. The bank must first say OK...then you need to find a Buyer and complete the transaction before the auction date.



Q. Are there restrictions to Buyers making offers?



A. Generally no, but the banks look at many factors, not just offer price.



Q. I saw a listing advertising a short sale, does that mean that a short sale is pre-approved?



A. No. Many Realtors and Sellers do not pre-complete the short sale package and the bank does not have knowledge. Also, even if the bank has indicated they will "review" short offers, does not bind them to accept any offer.



Q. Are short sales always a good buy?



A. No. Many short sales are in that position because the previous Buyer over-paid, or the property has other issues!



Q. Are short sales always difficult?



A. No, but much more intensive than a standard transaction. An experienced Realtor who knows how to present the package on behalf of the Seller can go a long way to make the transaction easier. Also, all banks handle them differently and each one is its own animal.



Q. Are short sales a good idea for the average Buyer?



A. Yes and No. Depends on your appetite for difficulty and how long you are willing to wait. It may take 120 days to complete...or it might get yanked from you at the end.