Miami real estate news and information

WHAT IS an “APPROVED vs. UNAPPROVED” SHORT SALE ?

 

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What does “SHORT SALE”  mean?   

Short Sale  means the lender has to accept LESS than what is owed on the mortgage – or the house can’t be sold.  

Homes purchased at the TOP of the MARKET (often with a minimal downpayment and/or with a hefty mortgage) can be tough to sell in this market … simply because the expected SALES PRICE is below what the owner needs to repay on the loan.

Given the current real estate environment  (and significant drop in real estate values)   mortgages can be higher than a home’s market value, what it’s worth or what it will likely sell for.  That can make a house virtually unsellable unless the current owner can cough up the difference and  pay-off his or her mortgage  …OR  convince the bank to accept a reduced pay-off.

What constitutes a SHORT SALE:

1) IT’S  NOT A SHORT SALE if the owner can come to  the closing table with sufficient funds to pay off the loan.

2) IT IS A SHORT SALE IF THE BANK  AGREES TO (even if just in theory!) A SHORT PAY-OFF (ie. less than the amount due on the loan).

The difference between Approved & Unapproved Short Sales:  

1) With an APPROVED SHORT SALE  the lender has already agreed to the SALES PRICE. 

2) With an UN-APPROVED SHORT SALE  the  lender is aware of the predicament the seller is in (having to sell in a market where the value of the property is less than what’s owed on the loan).  An unapproved short sale  means that the lender  has theoretically agreed to the idea of entertaining an offer on the property (for less than the amount owed on the mortgage).  But the lender’s commitment is rather nebulous.  An official commitment  from the bank won’t come until well after the contract offer-to-purchase has been accepted by the seller,  then presented to and reviewed by the lender (AND IT’S THE LENDER WHO HAS THE FINAL WORD!).  The lender is free to entertain the offer in any fashion they please: counter, accept, or reject it outright … Typically an un-approved short sale is a long and drawn-out process (3-8 months).

A lot of homeowners are tredding water right now, struggling.  If you, or someone you know.  is contemplating  a short sale, please share this information with them.   It’s a tedious project,  undertaking a short sale….  We do them successfully and will be more than happy to help you, truly.   I firmly believe that having a top local  Realtor who has expertise and is knowledgeable about the ins and outs of short sales makes a huge difference.   We are more than happy to work with you, and guide you through the process…   Please feel free to drop me a note here, or call a member of the Restivo Team on our cellulars – anytime  305-793-1365  or 305-632-0164.  

 That’s the short of it.

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