seller and buyer aren’t friends, relatives, or otherwise engaged in a fraudulent deal that would allow the seller to profit from the short sale. • After all their other conditions are met, the bank may issue an approval letter for the short sale.
WHAT CAN GO WRONG?
In some cases, the mortgage holder (lender) may decide that the payout from mortgage insurance is enough to cover their loss if they simply foreclose. If the title is not clear — perhaps there’s a second mortgage or other liens against the property — then the short sale is less likely to receive approval. Sometimes, the foreclosure process is already too far along. As we’ve discussed elsewhere, it’s important to prepare early. For a short sale, you’re not likely to have the same amount of time you could take for a more traditional real estate transaction. After all, the bank is missing out on your mortgage payments — the clock is ticking! You should submit your completed package of materials as quickly as you can, especially because it can take several months to get a short sale approved. In a few cases, the lender might approve the short sale in a couple of weeks, but it will probably take longer. The urgency of a short sale means you’ll have less time to market the sale of your house. You’ll also have less time for making any necessary repairs. Get started early to assess what needs to be done, and don’t delay any projects you can do yourself or afford to have a professional do for you. In some instances, you might have to sell your house “as is,” or come up with extra payments or allowances for the buyers.
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