A short sale means the bank is accepting less than the full loan amount in exchange for releasing the lien against the home. It doesn’t satisfy the full obligation, and will be reflected accordingly on your credit report. A homeowner will list his property for sale, typically at just below fair market value.
When an offer is submitted, the offer is submitted to their lender along with a very comprehensive financial package. This package includes tax returns, bank statements, pay stubs, a financial statement, and a hardship letter explaining why the owner can’t continue making payments. The offer is subject to approval by the lender. They will review the package and decide if they want to process it. They will order a BPO (broker’s price opinion) to determine the fair market value. A negotiator will be assigned to review the file and process it.
The whole process usually takes anywhere from one to three months. After the lender approves the short sale, the escrow period for the new buyer begins. Keep in mind that the sales price needs to be within a certain percentage of the BPO value, which percentage is determined by the lender. They will not take just anything for the property.
Avg. Sales Price: $387,350
Avg. Days on Market: 63
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