An experienced Realtor can mean all the difference when choosing to Short Sell your home or let it go in a Foreclosure.
Having represented both sides of a short sale, it is almost always a long 30-90 day process. The word “short” means the bank is short its original loan amount, they will take a loss. In no way does the word mean a short length of time to close. The current owner has put the home on the market knowing they can no longer get the full amount owed. By pricing it at the current market value, they are betting the bank will take the loss in value and accept a lower than loan amount offer. First the listing agent prices the home by what is currently selling in the market and advertising that it is a short sale and any offers must be contingent by the banks acceptance. After receiving an offer the seller must first sign the contract accepting the price offered. Then the owner contacts the bank and supplies them with the contract and other required information on the sellers’ financial situation. From here the home owners’ agent can step in and keep up with how the contract is progressing with the bank. This process can be long and difficult, banks have to deal with so many delinquent accounts that a short sale can be lost or forgotten. A good Real Estate agent will be in touch with the bank on a regular basis to keep the sale moving.
All the paperwork has been filed by the bank that holds the title on a Foreclosed home. When a home has been foreclosed upon it is currently owned by the bank, aka bank owned property. The former homeowner defaulted on the mortgage and walked out on the property. Many homeowners who simply could not afford their house payments anymore abandon the home. After the bank exhausts any reconciliation with the homeowners (sometimes up to a year) they hire real estate agents, appraisers and other professionals to get the home sold. The bank clears the title and puts the home back on the market asking a reduced price. The condition of the home can very according to the bank that holds ownership and the lost that that bank has acquired. Some banks go into the home and completely renovate the home with new carpet, paint and such, other banks sell the homes in "AS IS" condition with no repairs.