The difference between a short sale and a foreclosure is that in a short sale the seller is still the current owner of the property. However, the seller owes more to the bank or banks than the house is currently worth. The first question that you should ask is whether there is more than one loan and whether the loans are held by the same bank. If there is a second deed of trust with a different lender than the first then the second will need to be very flexible on what they will take to close the transaction. Usually they will not go below 10% of what they are owed plus some penalties. Sometimes they demand more based on the appraisal that is received during the escrow process. Typically a buyer is in escrow, subject to an approval by a lender or by two lenders.
The timing on a short sale is arduous. A buyer can often wait 4-6 months to get the property tied up. Until then the property is considered available to anyone who is willing to pay more than you are since the bank is interested only in the bottom line. They won’t take conditional sales, no credits for work that needs doing for the most part. The purchase is “as is” so a buyer needs to know what they are buying before the bank accepts the offer.

In a foreclosure the seller is the bank and they use formulas to determine how far off of list price they will go. On a $500,000 home they won’t go below 5% off list price for the first 30 days. If you are willing to pay full price you can usually tie the property up within a week. The transaction is run like a normal purchase for the most part from then on.

Our experience and relationships can make the short selling process much less painful. Please contact us for immediate help.