Excuse Me -- What is a Short Sale?

With the media focusing so intently on the real estate industry, I am running into people who have questions about some of the things they are reading in newspapers and watching on TV.  A common question I am asked is "What is a short sale?" 

Basically a short sale occurs when the proceeds from selling a home are less than the mortgage balance of that home.  In other words, when the home is sold there isn't enough cash to pay the bank off in full.  In this circumstance, the homeowner can request that the bank take less than the balance of the loan.

If you are shopping for a home in Joliet or the surrounding area, you are going to come across homes that are in a short sale situation.  This makes the negotiating process a bit more complicated. 

The purchase price is first negotiated with the current home owner and then contract becomes contingent upon the bank agreeing to a short sale. Though the homeowner is choosing to sell the home, he or she does not have the final say in whether an offer is accepted or not, the bank does.

Negotiating a short sale with the bank can take an extended period of time, so as a buyer you must exercise patience. Asking banks to speed along the process is like asking the IRS to hurry your tax refund. . .good luck with that.

If you have additional questions about short sales in the Joliet area real estate market, don't hesitate to contact me. . .I would be happy to guide you through the process.