For buyers considering a short sale purchase, it is important to understand what an approved short sale is when looking for real estate for sale. Although many homes are listed as a short sale property on the market, in many cases, the seller has listed them in this manner and the home has not been approved for a short sale by the loss mitigation department of the lender.
An approved short sale is a property that has already been approved by the lender for short sale. When buyers are considering different real estate homes, they should ask the seller if the home has actually been approved for this transaction by the lender. If so, the homeowner should be able to provide paperwork and details of the approval that the lender granted.
What happens if a home is not an approved short sale? This usually means that buyers will spend a lot more time trying to get the sale approved, since the homeowner has not already approached the lender about the possibility of a short sale transaction. If the home is not already approved, the seller will have to prove that they are dealing with a financial hardship that will not allow them to pay off their home.
Financial hardship has to be proven, the details of the potential transaction have to be provided to the lender and the lender has to actually decide if they are willing to allow a shortsale to occur. If so, then negotiation on the terms and the price of the sale will take place. This can take quite a bit of time and in some cases, while the seller may have agreed on a deal with the buyer, the lender will not agree.
While there are still negotiations that take place when a home is considered an approved short sale, it is much less time consuming for buyers. Approved homeowners already have their paperwork filed and financial hardship has already been proven. The lender has decided that they will allow a shortsale to take place. All that must be negotiated is the real estate prices on the home and the specific terms of the sale.
However, there is less of a chance that the sale will fall apart if the home has already been approved for this type of a sale.
Choosing a home that is an approved short sale offers buyers a faster way to enjoy all the benefits these transactions have to offer. Buyers can more quickly buy the home of their dreams and the lender is more motivated to go through with the sale at this point, making it easier for both parties to come to a good compromise after negotiations.