short sale (short sales, real estate, foreclosures)

[D517]

can anyone explaine a short sale to me? Seems they take so long with no guarantee the bank will accept the offer. I also heard that some banks want the buyer to pay tax on the difference on the sale price, and what the original loan amount is for. Is this true? We are looking in the West Valley of AZ.

[sh9730]

Go check out the Real Estate section of city-data. All sorts of discussions about short sales. Bottom line is though you can get a nicer home than many of the actual foreclosures, the trouble to get them approved by the bank etc. can make the process very unnattractive.

[musicforme]

I plan on seeking out short sales for the very reasons described by D517.

My wife and I will be living with her parents rent-free while we're house shopping. The longer it takes to get through the process, the more we can save for new furniture, etc.

[beckyinaz]

Just recently my husband and I were house-searching in the west valley. We looked mainly at foreclosures and short sales. Short sales were very frustrating. We put in a total of 7 bids, 3 were foreclosures, the other 4 were short sales. We were looking in mid-January. We did not get 2 of the foreclosures, never have heard back on the short-sales, and finally did get an acceptance from the last foreclosure. When you get an acceptance it states that the bank can pretty much cancel the purchase contract at any time up to the day of closing. My realtor said that she's had it happen where she's gotten an accepted offer, and a week before closing the bank transfers the short sale to the foreclosure department, which starts the process all over again. if there are multiple loans on the property, it's even more difficult. If you're in no rush and won't get frustrated at the time it takes to hear back, then it might be for you, but I found the process to be too difficult...

[Master Shake]

A short sale is basically a pre-foreclosure. It means the original owner with the mortgage cannot (or doesn't want to) pay anymore, but also owes more on the house than it is worth, and therefore cannot sell the house the usual way. In a true short sale, a new buyer will offer to buy the house for less than the mortgage balance and the bank will forgive (or erase) the difference between what the original owner owes and what the house sells for. These types of sales are "AS-IS" meaning there is no warranty or guarantee on the condition of the house.

As others have mentioned, this can take many months for the bank to process the paperwork, while the original owner usually remains in the house without making payments. However, if someone else comes by and offers a little more money for the house, the bank may cancel the first contract and try to work with the new buyer. Also, some banks just don't want to deal with this type of sale and simply evict the original owner and process the house through a foreclosure.