In today's market, especially in some parts of the country, like Southern California, short sales are as common as a traditional sale. In the area of East Chula Vista, California, they make up the majority of the market next to foreclosures. The traditional seller is definitely the "minority" in our area right now.
A short sale is a sale in which the seller's existing mortgage lender agrees to a loan payoff of less than the balance owed. The core of a short sale transaction is that the sum of the outstanding loans is greater than the property's sale price. The seller will need the mortgage lenders to agree to a loan payoff of less than what is owed.
As a Seller: Why consider a short sale?
A short sale can be a viable alternative to a foreclosure for both tax and credit consequences, which depends on the homeowner's concerns and circumstances.
For this reason it is good to consult with a licensed real estate professional who has experience in working with lenders in the short sale process.
As a Buyer: What does the buying process entail when making offers on short sales?
A short sale may take months to get approval from the lenders involved. If there are multiple lenders on the property it can take longer. An actual offer needs to be submitted to the lender to make the determination if a "short sale" will be approved and at what price.
If you are a buyer negotiating on a short sale, know that it will take time and requires patience. If your offer is accepted "pending lender approval" it does not mean you have an accepted offer. It is very important to have a real estate agent experienced in the short sale process help navigate through this type of transaction.
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