A short sale happens when the seller cannot sell the home for as much as they owe the bank.
Short sales are different from lender owned homes, homes in foreclosure or auction homes.
In a short sale the seller is usually still occupying the home. Showings and the selection of the realtor listing the home are still in the hands of the seller. However, the big difference is that when an offer is received all parties start to work with the bank to see if the offer is acceptable to them. What the seller wants for the property does not matter. Yes, they could refuse to sell the home but they are usually desperate and have no choice but to try.
Benefits to the Buyer of a short sale:
Typically the main benefit is price. You are getting a home at a substantial discount compared to similar homes in the area.
Inspection and negotiation. Unlike an auction or a foreclosure the seller in a short sale voluntarily listed their home and really does want to sell, so they are usually pretty cooperative. You will be able to inspect the home and have time to decide if the home is right for you and in acceptable condition.
Banks in short sales will negotiate. If you are a strong qualified buyer or a cash buyer you can usually bargain a good deal with the bank. The negotiation can take several forms if not in actual sales price at least on some closings costs or repair costs if there is a defect with the property.
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