Short sale is the process of selling the property with the intention of using the proceeds to repay the remaining balance of the mortgage.
This only happens when the value of the loan balance is greater than the value of the property.
This means that the borrower will not be able to pay the entire amount.
This is why lenders need to approve the borrowers for the said sale.
After they qualified, they have to comply with other requirements for it.
If you think that you already know all there is about it, think again.
There are a lot of things to learn, especially things that your lender is not telling you.
So what do you need to know about them? Among the first things that you should bear in mind is that lenders will take a long time before they approve your application for a short sale.
One of the reasons is because he is unsure if doing it will be beneficial for him.
A short sale definitely entails loss.
The payment that will be made to him is less than what is agreed.
This means, he will not generate the income he expects.
Before he approves any proposal for the short sale, he will evaluate all his options first.
One of the best ways for them to have more time is to change their processes.
Among the first steps you will do is to meet with a mitigation officer.
He will discuss with you the losses that the lender will incur if the short sale is approved.
The mitigating process will also change.
This is because lenders or banks are constantly finding ways to reduce losses.
Usually the changes they implement are not always favorable to homeowners or borrowers.
If you are a buyer who is looking for a home to purchase, it may take a while.
Even if you made a generous offer, it will not be a guarantee that you will own the property.
This is because the property will not be sold unless the bank approves it.
In other words, you made an offer to a property, which is not really available.
However, you have to bear in mind that this is a requirement in order for sellers to qualify.
You need to be patient though because it may take a while before the seller is approved.
Additionally, there might be better offers made.
This means that you may not get the property even if the seller qualified for short sale.
Banks also want to protect their profit.
They want to negotiate for a higher value from you.
This is why they want to make you believe that they will incur losses from the sale.
This is not always true.
In fact, most banks have already profited from your previous payments in the past years.
If you are qualifying for short sale see to it that, you are ready.
Prepare all the needed requirements.
Present your case well.
This way, you will have a greater chance of being approved right away.