What is a Short Sale?
There one thing a short sale is not…it is not short time-wise! A short sale usually takes three to six months or even longer depending on the bank. Some of the smaller banks seem to make decisions faster.
A Short Sale typically occurs when the owner of a home owes more on their mortgage than the property is worth. The owner will need to prove to the bank that they have a financial hardship that qualifies for a short sale. There are often two banks involved, one that holds the primary mortgage and one that holds the second. Agreement from both must be obtained.
Why would a bank agree to take less than what is owed on a mortgage? Foreclosure is an expensive and time consuming process for banks. Every case is different, but a short sale is usually preferable for both lender(s) and home owner.
As a buyer, is a short sale right for you? Here are a few things to consider:
- Are you willing to wait 4-6 months to close? If you need a home within a certain time period, then a short sale may not be the best choice.
- Can you handle the uncertainty and disappointment if the short sale is not approved? Make sure you are working with a good buyer’s agent who will protect your earnest money and minimize your out of pocket expenses.
- Most short sale properties are sold “as is”. It’s important to get a home inspection from a qualified home inspector so you can won’t be hit with surprises after closing. If the home is in obvious disrepair, it may not meet the standards of your lender, especially if you are using an FHA loan.
- Are you willing to pay your own closing costs? In Georgia, closing costs are negotiable and a seller will often agree to pay all or a portion of the buyer’s closing costs. Most banks will not agree to pay closing costs on short sales. It depends on the bank.
Where can you find Atlanta short sale properties for sale?
Just ask and I’ll be happy to send you a list! You can search specifically for Atlanta foreclosure properties and bank owned properties here. Some real estate companies will list “short sale” or “possible short sale” in the comment section and will not specifically list it in the Short Sale category, which can make searching a bit of a challenge. If you see a property that says “must use Seller’s attorney” or “Seller to choose closing attorney”, that is a big clue that it is a distress sale, either a short sale, foreclosure or possibly estate owned.
* All information believed accurate but is not warranted. All rights reserved.
