Could someone please explain short sale?

[Breakthecycle2]

I understand the jist of it, but there are some things I am unsure about. Can you include closing costs? Do you bid higher then the asking price? Can you go lower?

[ShanetheMortgageMan]

Typically the short sale approval lender will only allow a limited amount of closing costs to be paid by the seller, 3% or could even be a flat figure.  You can offer higher or lower, your agent will ask the listing agent if there has been a lot of offers, etc., basically feel them out and will advise you as such.  If it's an "approved short sale" that means the sellers lenders have already reviewed the property and the list price is most likely what they will accept.

[Breakthecycle2]

So "bank Approved" means the listing price is what they will accept or higher?

[ShanetheMortgageMan]

Yes, however few will deviate from that price, particularly if they don't feel the home wouldn't appraise for higher.

[Breakthecycle2]

---

@ShanetheMortgageMan wrote:

Yes, however few will deviate from that price, particularly if they don't feel the home wouldn't appraise for higher.

---

Understood. Thanks for the clarification. It seems so many agents advise against short sales.

[ShanetheMortgageMan]

Because it takes awhile for the deal to close, longer to wait for a commission...  and also there is never a guarantee an offer will be accepted on any property, but with a short sale you may not find out for months.  For someone not in a rush it's very appealing.

[Breakthecycle2]

---

@ShanetheMortgageMan wrote:

Because it takes awhile for the deal to close, longer to wait for a commission...  and also there is never a guarantee an offer will be accepted on any property, but with a short sale you may not find out for months.  For someone not in a rush it's very appealing.

---

We are not in a rush at all, so that's why I was thinking about it. I appreciate it your answers and time Shane!

[ShanetheMortgageMan]

Welcome.