What Is A Short Sale Listing Agreement

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asked Jan 25 in History by colt57peony (670 points)
Do you know the difference between a <a href="http://www.capitalrealty-investments.com">Foreclosure</a> and a Short Sale? <br /><br />A Foreclosure is a legal <a href=https://en.wiktionary.org/wiki/process>process</a> in which the bank goes through the court system to take back the ownership of the home.<br /><br />In most cases, the homeowner has either abandoned the property, stopped paying the mortgage or has voluntarily deeded the home back to the bank.<br /><br />Differences?<br />There are 2 main differences between a Foreclosure and Short Sale.<br /><br />Ownership<br /><br />In a Short Sale situation, the homeowner actually still owns the home and in a lot of cases, still lives in the home as well.<br /><br />However in a Foreclosure situation, the bank owns the home. Most of these properties are going to be vacant because the bank is holding the ownership. <br /><br />Time<br /><br />The time it takes from contract to close is significantly different between a Short Sale and a Foreclosure. <br /><br />In a Short Sale, do not let the name be deceiving because it is anything but a short process. <br /><br />A Short Sale can take anywhere from 3 months up until 2 years. <br /><br />The reason a Short Sale takes so long is because the homeowner is actually in an active negotiation with the bank.<br /><br />Again, you’re asking them, will they take the $150k instead of the $250k.<br /><br />And in addition, the people that are handling the Short Sale files have a lot of files on their desk.<br /><br />It takes a lot of time to go through them and review all the different aspects in order to make a decision on the negotiations.<br /><br />In contrast to a Foreclosure, the closing process takes a pretty standard amount of time that actually goes by a little bit faster depending on your financing.<br /><br />This is mainly because of two things;<br /><br />The bank has already taken ownership of the home.<br />The bank has already reviewed all financials behind the home and they know exactly what they need to do in order to sell it so as to cover their losses.<br />Therefore, when you submit in an offer for the bank, they’re able to give you an answer back really quickly.<br /><br />Similarities?<br />There’s one aspect of a Short Sale and a Foreclosure that is very similar.<br /><br />In most   cases these two types of properties are going to be sold to the buyer in an “as-is” state.<br /><br />In a short sale, a homeowner advertises their home without making any repairs simply because they don’t have the budget to do so — otherwise if they did, they’d be holding onto their property.<br /><br />So due to lack of funds thereof, the homeowner tends to agree with the buyer to take the property “as-is”<br /><br />And similarly;<br /><br />When you’re dealing with a Foreclosure, you’re most likely dealing with a big national bank.<br /><br />And since banks aren’t really in the business of real estate (they’re in the business of banking)<br /><br />Their main goal is to get rid of the property so that they can cover their losses as fast as possible.<br /><br />This means that they are less likely to try and make repairs on the home.<br /><br />Now please don’t get me wrong because I’ve seen in both a Short Sale and Foreclosure situation in which successful negotiations for credit have been reached in which repairs are made.<br /><br />

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