This term describes a sale where more is owed on the property than the property is worth. A seller will put his property up for sale at a price lower than what is owed in order to attract offers that can be submitted to his lender(s) for approval. Therefore, when the property is listed through a real estate agent, the sale is contingent upon the creditor(s) approval of the sale. Many lenders right now would rather sell “short” than have a foreclosure. In order for a seller to sell in this manor, he must prove true hardship circumstances.
The creditors may reject or propose changes to the original offers. They usually require that the property be sold in “as is” condition, and they do not want to see the seller paying for any of the buyer’s expenses in the transaction. The seller and the interested buyer do not have to accept the changes; however, this would eliminate any chance of a Short Sale.
Creditors often do not respond to offers in a timely manor, so all parties need to be very patient. The creditors (third parties) rarely meet the deadlines set out in the Utah real estate purchase contract. Be prepared for delays in receiving an initial response. A buyer may cancel his offer on a Short Sale at anytime prior to coming to terms with the seller and third parties.
This is an opportunity for buyers to obtain properties far below what they would ordinarily have to pay. It is an opportunity for a seller to avoid bankruptcy. A good Realtor is able to help a buyer and/or seller navigate their way through this process.
If you have real estate in southern Utah and you need advice about how to handle a short sale – please contact me. I’ve handled many of these for clients this year already.
Thanks and good luck!
