[A short sale is a situation where the seller, due to a real hardship, is selling a house or condo with the probable selling price being less than the mortgage owed.]
Short sales take time for the lender approval process once the seller and buyer have agreed on the contract terms. This decision process can take months. All the while, anxious sellers and buyers await a decision.
Sellers should know that with short sales there are multiple potential outcomes.
- the lender approves the price and waives the deficiency
- the lender approves the sale but asks sellers to sign a personal note (promissory note) for the deficiency
- the first lender approves the sale and waives the deficiency but the second lender will not approve the sale without having seller sign a promissory note (more than one loan, each must approve sale)
- lenders reject offers - not as frequent in my experience
- lender process a foreclosure while lender considers short sale offer [I have read of cases where the same lender has one office foreclose while another section thinks they are working on a short sale. These lenders can be big bureaucracies.
- others I have not listed I am sure.