One of the most common questions I’m asked is “What is a Short Sale?”

When a property is labeled as a “short sale” this means that the buyer is in default on their mortgage payments and has asked the lender to work with them in accepting less money than is owed on the current mortgage.  Although the seller is still technically in possession of the property, it is the lender who will determine whether or not the home will sell.  The lender will require the owner to submit a “hardship” application proving that the seller does not have the financial capacity to pay for the home or make up the difference in what the home might sell for versus what is owed.  Once approved, the lender orders a BPO (broker price opinion) or an appraisal to determine what price would be fair for them to accept knowing they are going to take a loss.

Buying a home that is labeled a short sale at a good price is possible, but generally not without some challenges.  Typical issues you will encounter are primarily time for acceptance and lack of firm pricing decisions.  Quite often, lenders can take 30 days or more to respond to an offer due to the approval process they must go through once an offer is received.  I’ve seen short sales in Atlanta take up to 6 months before there is a response. This lengthy and exhausting approval process can very frequently result in even “full price” offers being rejected.  Sellers and lenders are under no legal obligation to accept even a full price offer.  They can change their mind at any time and they often do. If you haven’t read my series on the 10 Biggest Mistake Buyers Make in Today’s Market, than at least read Mistake #5.

I’ve seen many homes listed at “incredible” prices and labeled short sales, only to find out that the price was never even in reason of being accepted by the bank.  The seller/agent may have been trying to just create interest and get an offer to see if the lender would act on it.  In the end, this creates frustration for everyone from the lender to the buyer, and the purchaser. 

If you DO decide that a short sale is an option that you would like to pursue, be sure to get a qualified Atlanta realtor who understands the process, the best way to present your offer and the skills to know how to follow up with the bank and other agent….I’ve dealt with many short sales in my career and would be happy to pass along my findings. Katerina Gasset also specializes in short sales in Wellington, Florida and Chris Canzano is THE short sale specialist for SWFL.

There are still several Atlanta short sales on the market right now. But, what’s even better are overall there are STILL just a ton of GREAT ATLANTA HOME DEALS right now whether they are short sales, foreclosures or just MOTIVATED SELLERS. I know the economy seems scarce, but Atlanta never saw the over-inflation of home prices the way other areas did and therefore is already starting to stabilize. Home prices increased 1.5% last month. Expect this trend to continue. No one’s going to ring a bell at the bottom!!

 So, get in on one of the biggest discount sales events this country has