Short Sale
Short-Sales can still be a nightmare so if you are determined to make a distressed property purchase Lender Approved Short-Sales mean the lender has already agreed to an amount less then what is owned on the mortgage. Keep in mind that only 15% of Short Sale transactions ever close and transfer ownership. Also if you want to purchase Short Sale property be prepared to pay more then the Asking Price you see advertised or on the MLS listing. You may have a signed and legal contract with the real estate owner but it is the 3rd party, mortgage lender(s) that determines if they will allow the sale and how much money it will cost you.
A short-sale means that the Seller is trying to get their mortgage company (bank) to agree to accept less money then is owed on the mortgage and release the property owner from further obligation or let them sell the property and either workout a payment plan for the balance due to the mortgage company or have the seller liquidate other assets and bring cash to the closing table to pay the balance that has been worked out. Short sales could mean waiting months for a response from the Bank / Mortgage Lender. In 2010 the process for the seller and buyer of a short sale property has changed so everyone needs to find a qualified source of information.
Benefits of HAFA for Buyers:
The guidelines include standardized forms, procedures, and timelines, but best of all they allow the seller to receive preapproved short sale terms prior to the property being offered for sale. Since the preapproval should eliminate the months of waiting to hear back from the lender the short sale process should be a reasonable time frame for the buyer.