PORTLAND, Maine (NEWS CENTER) - We're talking short sales with Chris Saladino from Ocean Gate Realty in Portland.
What is a short sale:
It's a sale where the property owner sells the the property for less then what is owed. The bank/ lien holder accepts that amount and release the lien against them.
What's the process?
The property owner, for a number of reasons, decides they need to move on. They list there home at current market value. Once a buyer comes along and a contract is created between the buyer and seller, the seller then brings the contract to the lien holder and convinces them to take the contract.
Why would the lien holder take the contract?
Because the property owner can't afford the home, so they can't pay the mortgage so in the end, it's either the contract in hand or lien hold will need to go through foreclosure proceedings. In most cases, foreclosure costs a lien holder more then than the amount of the loss they will incur by accepting a short sale contract.
What are some of the things the seller needs to do?
The seller needs to layout there entire financial situation and prove to the lien holder that they can not continue paying the mortgage and show their "hardship"
What should buyers be aware when of when buying a property that is in a short sale?
That the transaction may take a long time. The ultimate goal is getting a "consent" letter and that can sometimes take months.... .so exact closing dates are often unknown until the end of the transaction. Each lien holder has its own approach and processes. Many times the property is a buy-as-is. Buyers should make sure there doing building inspections and understand what the property will need once they take ownership. Often times sellers in this situation have stopped maintaining the property and inspections will flush out the issues.
The big thing is patience while a buyer may be able to get a "good deal" they have to have the flexibility to handle the up and downs and delays that might occur. If they have that flexibility then buyer a short sale property may be for them!