Real Estate Short Sales

After the loss mitigation department has had the chance to thoroughly examine a borrower's short sale package - and after they have received answers to their questions during the negotiation phase - they will generally be ready to make a decision about the short sale. Many times, a lack of questions from a lender is a positive sign; it often means that they have received everything that they need, and an approval is imminent. On the other hand, an extensive number of questions doesn't necessarily mean that things aren't looking good; it could just mean that the situation is more complex than was anticipated.

Assuming that everything goes the borrower's way and the short sale is approved, time is definitely of the essence. Most of the time, a 30-day deadline is put into effect. Closing must occur before the thirty days is up, or the short sale approval will be reversed. Therefore, it is always in a borrower's best interest to line up a solid buyer before initiating the short sale process. Although this isn't always possible, or worth one's time, it is a good way to avoid missing the deadline and forfeiting the possibility of a short sale altogether.

By bringing a potential buyer into the mix early on in the process, a borrower can reduce the odds of going past deadline on his short sale. The deadlines that are imposed by banks are generally used to keep borrowers from dragging their heels or from using the short sale process to prolong the inevitable. It also helps to weed out those who are truly serious about engaging in a short sale from those who are doing it for impractical reasons.

Next: Short Sales Vs. Foreclosures