How do short sales work?

Normally they only have a first mortgage. The seller tries to sell the house for less money than they owe.

For example, if they owe 200,000 on the home, they try to sell home for 150,000. So the paper work is written up, and sent to the bank. They will decide if they are willing to lose 50,000 on the sale. If they are willing to lose the money, the will agree to the sale, and when it is sold, they get all the money of the sale.

Normally with this, once you make the offer, it will take 2 to 6 months to get a yes or no, You will have to make your offer almost always on a "as is" basis, since no one is going to fix things wrong at this point. So you will normally do your home inspection prior to making your offer.

Of course you could wait 5 months and they just say no. The banks do not have to accept less.

A short sale, also called a short pay, occurs when the loans and liens against a property, are greater than the proceeds from the sale of a home. The lenders then agree to accept this payoff amount, or short pay. The tern short sale does not apply to the length of time the process takes! In any casse you shoul contact the short sale experts, because not always you can do a short sale.

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