What is a short sale?
A short sale is when a lender receives less than the loan balance when a home is sold, the bank is the one that takes the “short” amount. Each lender has their own criteria for accepting and processing a short sale.
Why are some homes sold as short sales?
A home owner who’s house has no equity or “upside down” may be able to put the home on the market as a short sale. The seller will first need to qualify for a short sale by contacting a Realtor. In most cases the value of the home has declined (in some areas more than others) since purchasing the home for example, the owner bought the home for $550,000 two years ago, but the current market value of the home has gone down to $350,000. It would be impossible to find a buyer to pay the $550,000 in the current market. so the bank would be receiving a “short” payoff amount.
How long does the short sale process take?
Each short sale transaction is completely unique, I always say “the number one rule with short sales is there are no rules” each lender has their own criteria and patience is often the name of the game. You can expect at least 60 days for the process to be complete, yet occasionally you can close in 30 + days. Each negotiator at the Loss Mitigation Department of a bank is often working several hundred files at the same time! To speed things along, the seller is requested get all the required documents ready before listing the home and a Realtor that builds a good relationship with the negotiator always helps!
Contact Delroy Gill your local short sale expert: 303 803 0258
Stay tuned for more FAQ’s about Short Sales in Denver updates to come….