A short-sale listing is one in which the owner still owns the property, but owes more money on his mortgage than he will get from selling the property. Short sales require the seller’s bank to agree to the final sale price. If more than one bank holds a mortgage on the property, each bank has to approve the sale.

Short sales are different than foreclosures or bank-owned properties. If the home-owner cannot sell the home through a short sale, the bank initiates foreclosure to try to sell the home directly, often in an auction. If the auction fails to turn up a buyer willing to pay at least what the bank was owed on the home, the home becomes Real Estate Owned (REO), where the owner is the bank. The bank then typically sells the property through a real estate agent.

If you are planning to make an offer on a short-sale listing, you should be ready to wait as long as one year for the banks involved in the process to approve or reject your offer. Many types of short sales are a long-shot. If you make an offer on one, you may want to continue touring and considering other homes in case the short sale does not go through.

Because the chance of success on short-sale offers is extremely low, TheLARealEstateTeam.com does not support short-sales for tours or offers.

This entry was posted on Tuesday, April 28th, 2009 at 12:23 pm and is filed under California Real Estate, Foreclosures, Mortgage, Real Estate in America. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.