Profile picture for srclgic

What is a short sale,is it easy to identify them an purchase without a downpayment?

I'm also interested in the best way to identify them in a specific locale and the complexity of the negotiation process between the seller and bank involved.
  • January 11 2009 - Danville
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Answers (4)

I am sorry, you also asked what a short sale is. A short sale is simply an offer to purchase a home for less than is presently owed to the lender for the home. You are offering a price "short" of what is owed to the lender. This explains why lenders take their time in getting back to the purchaser, as I am sure the bank explores every other avenue to prevent the losses. Hope that helps you! Best wishes, Jim
  • January 25 2009
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There are many great loan programs available to you, however, most do require some downpayment. The exceptions are VA, USDA, and VHDA in Virginia. FHA requires a 3.5% downpayment in 2009, however, you are allowed to use gift funds from a family member or your job. In terms of negotiating short sales, they are not complex, but they tend to be time consuming where you make an offer, and that offer seems to enter a black hole, with the bank getting back to you on their time frame. That is the hardest part, to my mind, of a short sale transaction.
In terms of short sale listings, they are relatively easy to identify, newpapers, Realtors, even some banks offer lists for free. There are some wonderful deals to be found, I suggest you post a Mortgage quote request here on Zillow and gain some great info from some of the Zillow lenders on here. I wish you great luck in your search!  Jim
  • January 25 2009
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You are extremely unlikely to get bank approval of your offer without a downpayment.

a local real estate agent can easily search the available short sales on the MLS. However, you should probably also look at the bank owned (REO) homes, as they will be easier to actually negotiate a deal with.
  • January 11 2009
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Profile picture for prcdbear
I can't tell you about the specifics of identifying them, but can give you some advice on short sales. The best advice is to be patient. Nothing happens quickly. Currently we have an offer on a house in San Jose, CA that's a short sale. A short sale is when the property owners owe more than the house is worth and the banks agree to take less than they are owed on the property. In our case, the owners owe about $730K on this house and we made an offer of $518K.

We made the offer on Aug. 26. The seller's bank in the past 2 weeks asked for some info from our lender. It been almost 5 months and we still don't know if the banks will accept our offer, counter or reject it. We haven't gotten into the negotiation part, but I don't expect to negotiate anything. They will either take our offer or proceed to foreclosure.

Good luck if you do move on a short sale. The biggest problem we have faced is the lack of information coming from the seller's lenders. They don't respond. Make sure you have a good agent that's familiar with this process. It seems to be a long and complicated one.
  • January 11 2009
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