We're
hearing
a
lot
about
short
sales
these
days.
The
key
words
in
the
Multiple
Listing
Systems
around
the
country
are
"third
party
approval
required,"
or
"bank
approval
required,"
which
is a
signal
that
the
property
you're
looking
at
is
actually
being
sold
by
the
mortgage
holder
rather
than
the
deed
holder.
Before
you
get
involved
in
one
of
these
transactions,
understand
what
they
are
not:
a
short
sale
is
not
simply
a
sale
of a
property
for
less
than
the
original
purchase
price.
It
is
not
necessarily
a
"pre-foreclosure."
It
is
not
always
a
good
deal.
What
a
short
sale
is:
A
short
sale
is a
pre-foreclosure
only
in
the
fact
that
the
lender
has
decided
to
receive
payment
on
the
note
for
less
than
the
face
amount.
The
sellers
have
determined
there's
no
way
they
are
going
to
get
as
much
for
the
house
as
they
owe
and
they
can't
stay
in
the
property
for
one
reason
or
another.
The
terms
of
such
sales
will
differ
lender
to
lender.
Some
require
that
the
owners
demonstrate
they
can't
afford
the
house
(that
they're
broke,
in
essence)
and
that
there's
no
money
to
bring
to
the
table
to
make
up
the
difference.
It's
a
sticky
situation
for
the
sellers/owners.
They
don't
want
to
hurt
their
credit
or
go
into
foreclosure,
but
they
have
to
move
because
they've
been
transferred,
lost
a
job,
took
a
new
job
or
are
overextended,
but
they
don't
have
the
cash
to
pay
the
marketing
costs,
closing
costs
and
pay
off
the
mortgage.
Short
sales
are
real
diamonds.
I've
seen
some
that
look
great
--
offering
closing
costs,
aggressive
pricing,
and
selling
bonuses
--
just
to
get
the
house
off
the
books.
Conversely,
they
can
also
be
some
of
the
toughest
deals
to
get
through
to
settlement
if
the
lender
has
lost
too
much
money
already
and
just
wants
to
wait
out
the
buyers
until
one
comes
along
who's
willing
to
buy
the
house
in
disrepair
with
no
closing
costs.
If
you're
writing
a
contract
on a
short
sale
here
are
a
few
tips
to
keep
in
mind:
Be
patient.
Because
of
the
current
default
situation
on
mortgages,
the
lenders
are
inundated
with
many
of
these
type
properties.
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You're
offer
is
one
of
many
and
the
processor
will
get
to
it
in
turn.
Don't
expect
a
response
in a
day
--
maybe
not
even
two
to
three
days.
Sometimes
a
week
is
not
out
of
the
ordinary.
Putting
in
language
such
as
"response
required
within
24
hours,"
may
just
be a
waste
of
time,
rather
than
a
stimulus
to
get
a
faster
response.
A
good
comparative
market
analysis
is
imperative.
Be
sure
to
hit
the
price
right
on
the
head
and
offer
close
to
it.
Most
lenders
have
already
lost
enough
money,
they
don't
want
to
lose
more
with
a
really
low
offer.
If
it's
overpriced,
then
offer
right
at
the
CMA
amount.
But
if
it's
right
on,
offer
the
full
price.
Pile
on
the
contingencies.
This
works
well
if
you're
writing
a
full
price
offer.
Those
would
include
inspections
(home,
pest,
radon,
etc.);
appraisal;
financing;
etc.
Ask
for
a
lot
and
expect
nothing.
Be
on
top
of
your
walk
through.
Most
short
sales
don't
like
home
inspections,
thus
be
aware
of
the
condition
of
the
property.
If
possible,
test
all
the
systems
(electrical,
plumbing,
heating/air).
This
is
as
simple
as
flushing
toilets,
using
a
socket
tester
(available
at
hardware
stores);
and
turning
on
the
furnace/heater/air.
You
may
even
want
to
turn
on
the
washing
machine
and
dishwasher
--
but
ask
the
listing
agent
beforehand.
If
you're
on
the
selling
side
of a
short
sale,
keep
in
mind
you're
not
the
one
in
control
anymore.
The
buyer/agent
is
going
to
be
dealing
with
the
listing
agent
and
the
lender
more
than
anyone
else.
You
may
want
to
be
involved
in
the
sale,
but
you're
mainly
there
to
agree
to
the
terms
set
forth
by
the
lender.
Sign
the
paper
work.
Move
your
stuff
--
out.
They
want
their
money
and
your
home
is
the
only
thing
standing
in
the
way.
So
you're
out
of
trouble,
right?
Not
so
fast.
The
bank
could
come
after
the
rest
of
the
balance
separately
from
the
sale,
just
like
they
can
with
a
foreclosure.
On
top
of
that,
any
cancellation
of
debt
above
$600
is
supposed
to
be
reported
as
income
to
you
through
Form
1099-C
(Cancellation
of
Debt)
to
the
IRS.
For
instance,
let's
say
you
sell
your
house
for
$30,000
less
than
you
owe,
that
30-grand
could
be
additional
income
the
IRS
will
want
to
tax.
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