1. SHORT SALES
What Every Buyer Needs
to Know About Short Sales
2. What is a short sale?
• A short sale means a lender
is willing to accept less than the total
due on the mortgage.
• A lender will approve a short sale to avoid
the high costs of a foreclosure.
• Some lenders will allow a buyer to
purchase a home for less than the
mortgage balance while in the pre-
• THERE ARE 3 STAGES OF
6. Qualifications for a Short Sale
– The mortgage is in the process of default
– The seller has no assets
– The seller is experiencing economic
– The property market value has declined.
7. Types of Hardship
– Medical Emergency
– Sudden Illness
8. Steps to Taken for Short Sale
• Seller signs a listing agreement with a real
estate agent to sell the property as a short
sale which is subject to the lender’s
9. Steps to Taken Short Sale
• Listing agent finds a buyer who makes an
offer for less than the amount of the
10. • Seller accepts the buyer’s purchase offer.
• The lender accepts the buyer’s offer.
11. • Once all the contingencies are met and
due diligence is performed.
• The buyer delivers the funds
• The lender releases the lien
• The seller delivers the deed.
12. What should a buyer
• Obtain a real estate attorney
• Make the offer contingent upon a property
inspection and the lender’s acceptance of
13. What should a buyer
• The buyer should allow the lender a
specific amount of time to accept the offer.
• If the lender does not accept the offer
within that amount of time the buyer
should be able to withdraw the offer.
14. Why a short sale may not be
– The seller paid too much originally for the
– Home sells in “as-is” condition.
– Transaction takes to long to close.
15. Why a short sale may not be
– Lender can modify the terms of the sale at
– Higher than normal closing cost
16. Things to Remember
• It may take between 30 to 90 days to
17. Things to Remember
• The seller can accept the
offer but the lender must
approve the short sale.