Video transcript: Pursuing short sales
On screen:
What's a short sale?
On screen:
Amy, Real estate agent
Amy:
It's not short, it's not quick. [laughs]
It's a very long process, and what it is, is when the home owner is in a financial situation where they need to sell their home, but in order to do so they are not going to be able to make enough money, sell it for enough, in order to pay off their mortgage, so basically they're coming up short on that mortgage payoff and that's why it's called a short sale.
On screen:
Tom, Mortgage banker
Tom:
So when you put an offer in on a short sale, not only does it have to be approved by the owner of the home but it also has to be approved by the lien holder or the mortgage holder of whoever owns the home at the time.
On screen:
Chris, Real estate agent
Chris:
You can buy a home substantially under market value. If time is on your side and you're willing to wait it out and potentially lose a property that you have a bid on, even after waiting six months or longer, and still not get that
property--if you're flexible on time, if you're flexible on the property-- it could be great. One of the problems with short sales is most lenders will leave that property open for other offers, even if the seller has accepted your offer, the lender can reel in multiple offers even if the seller has signed a contract to accept your offer contingent on the bank's approval. So, you could be outbid in month seven after waiting for seven months.
On screen:
Tom and Sabra, homebuyers
Tom:
The most important thing that I would say for when dealing with a short sale is to get with an agent or a realtor that has some experience with short sales, and can guide you through it, because they can be confusing, they can be frustrating and they're not something that you're maybe going to be able to figure out yourself.
On screen:
Short sale
- When the listing price is less than what's owed on the mortgage
- Can offer great value, but process can be unpredictable
Learn more about finding and buying a home.