Thursday, April 17, 2008
What's a "short sale"? In brief, it's when a homeowner sells their home for less than what they owe on their mortgage(s). Obviously, in order for this to happen their lender needs to agree to the deal and get less than they are owed. This is why you will often see the words "Third Party Approval Required" on a listing. That's code for "The seller's lender needs to sign off on any deal."
There is a perception in the market that because there are so many "short sale" listings then lenders must be signing off on these deals. Unfortunately, the reality is a bit different. Lenders are agreeing to some short sales, but the majority of offers are rejected after a laborious and time consuming process. Check out this article in The Wall Street Journal.
Bottom line: approach "short sale" listings with the idea that there are likely many obstacles to overcome in order to make a deal. They are worth checking out, but manage your expectations.
