In a nut shell, a short sale is:
a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrower. (Wikipedia)For those of you out there looking at the purchase of a short sale property, I have one word of advice - patience. With my first hand knowledge of the short sale experience, I am now confident in coining it "the short sale saga" and a poor friend of mine is still in the midst of it.
It started in late June with agreements on price, contracts drawn, deposits given and off to the bank for approval. The parties were told everything would be wrapped up in six weeks. Here we are now in early December and everyone is still waiting. What the lenders don't seem to realize is that while their desks are backlogged with properties, there are real life people out there just trying to buy a home. It would seem that in many cases getting these properties off their books can be a win-win-win for lender, owner and new buyer. Now, I don't pretend to understand the minutia of the real estate market but it seems that somewhere out there, a breakdown in the system has definitely occurred. Why is it that bureaucratic nonsense always takes precedence over common sense? I have no answer to that question. And when will this process finally be over? Not sure about that either, but stay tuned.