Short Sale

Archive for April, 2007

A Short sale is a very good idea on paper. But, in practice, a short sale can be very difficult to do. Depending on the US state you are in and the Foreclosure law in that state, a short sale may be done by yourself, a homeowner with the help of a realtor or a buyer or a real estate investor.

What is a short sale?

A short sale or real estate short sale is the process where the homeowner is upside down in his or her mortgage and he or she has no way of paying the bank off. Please note that not every homeowner with an upside down mortgage will qualify for a short sale. Only homeowners with dire financial situations will be considered by the banks for short sale cases.

Would a bank accept a short sale proposal?

There are many reasons why a bank would or would not accept a short sale proposal. The bank will consider whether they will be able to get more money from the homeowner in Foreclosure than the amount proposed in a short sale proposal. If the bank feels that foreclosing will bring more money to them, then they will not accept a short sale proposal.

However, if the bank feels that, after reading the short sale proposal, the homeowner is so strapped for cash that foreclosing is not going to bring in any more money than the amount offered in the short sale proposal, then the bank is likely to accept the short sale proposal.

That means, whether a short sale is successful or not depends largely on whether the short sale proposal is convincing or not.