What is a short sale in Connecticut?
What is a short sale in Connecticut?
A short sale, also known as a pre-foreclosure sale, is when a person sells his or her home for less than the balance remaining on the mortgage. If the mortgage company agrees to a short sale the property is sold and the proceeds are used to pay off all, or a portion of, the mortgage balance.
Do Realtors make money on short sales?
While a seller typically pays all real estate agent commissions and other closing costs, in a short sale the seller pays nothing; the lender or bank foots the bill.
How does a short sale work on a property?
In a short sale, the home sells for less than the seller owes, so the lender won’t get all their money back. As a result, the original lender must agree to the sale. The seller must prove they have no other option. Next, the seller needs to show some sort of hardship.
How long does the bank take to approve a short sale?
The short sale process, from submission to short sale approval, is generally as follows: Submission of offer and complete short sale package from the seller. Bank acknowledges receipt — 10 to 30 days. Bank orders a BPO or appraisal — 30 to 60 days.
How long does a short sale take in CT?
When there is only one mortgage, short-sale experts say lender approval typically takes about two months. If there is more than one mortgage with different lenders, it can take four months or longer for the lenders to approve the sale.
How long does it take to close on a short sale?
Be aware the short sale process could take much longer than a traditional home purchase. Even with a qualified agent, it’s not uncommon for short sale transactions to take six months or more to close.
Who pays commission in a short sale?
In a short sale, the commission technically remains the responsibility of the seller, but the lender covers it with part of the sale proceeds. Because short sales are designed for financially-distressed homeowners, sellers seldom can afford to contribute money to close the deal.
How does a short sale benefit the buyer?
Rather than continue losing money, or wasting more money on a foreclosure, many banks offer buyers of short-sale properties favorable financing terms to make the sale more attractive. The lender may offer a low interest rate or other buyer-friendly terms to get the property sold and avoid further expenses.
Why would a short sale be denied?
A short sale is sometimes denied due to something as simple as the seller being current on paying their mortgage. The bank’s guidelines might state the bank isn’t allowed to approve a short sale if the mortgage payments aren’t in arrears.
Why do banks take so long to approve a short sale?
When an owner applies for a short sale, the lender will ask for a ton of paperwork. Sometimes it seems that the lender asks for more paperwork in a short sale than when the borrower took out the loan. And the more money the lender will lose, the more time it may take to process and approve the short sale.
What is short sale on a house?
A short sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage servicer agrees to a short sale, you can sell your home and pay off a portion of your mortgage balance with the proceeds.