Have you seen real estate signs indicating a short sale, but are curious as to what a short sale actually entails? in today’s article from Pink Lightning Investments, we’ll explore how a short sale is different from another type of real estate transaction.
What is a Short Sale?
In a short sale, the transaction typically involves a “distressed” property. The homeowner is typically facing imminent foreclosure and they may also be behind on their mortgage payments.
A short sale is, by definition, a property sale that’s approved by the lender for a price that’s less than what the property owner owes to the bank. So the sale comes up “short” on covering the total amount due to the lender.
The bank must approve a short sale offer before the sale and proceed, so this can be associated with a bit of extra time when it comes to the timeframe for the short sale transaction. But this is where it can help to work with an experienced team of investors who can move quickly to complete their end of the transaction.
Generally, the property owner is released from further obligation to the lender once the short sale is approved, particularly if you pursue a HAFA short sale. Though it is possible that the bank could come after the prior owner for the unpaid balance, called a deficiency.
In the case of a short sale, the home is typically sold as-is.
In this sort of transaction, the homeowner may qualify for up to $10,000 to relocate, as this is one of the benefits of pursuing a HAFA short sale.
How is a Typical Sale Different From a Short Sale?
In a short sale, the home is sold for less than the amount owed on the mortgage. The sale is typically prompted by financial difficulties. And while financial difficulties may play a role in a typical sale, it’s not always the case.
In a typical sale, it’s assumed that the home will be sold for a sum that’s equal to or more than the amount owed on the mortgage (assuming the owner has a loan on the property.) The key distinction is that the lender does not need to approve the transaction as is typical for a short sale. This means that a typical home sale tends to be a bit faster than most short sales.
Notably, in recent years, new laws were implemented that resulted in dramatic decreases in the amount of time that it takes a lender to approve the short sale transaction.
Sell Your Home to Pink Lightning Investments
If you’re seeking to sell your home to our real estate investors, we’d love to speak with you. At Pink Lightning Investments, we work with clients throughout Texas and beyond, purchasing your property for a fair price, while also helping distressed property owners and other homeowners who need to sell their property promptly and in as-is condition.
Pink Lightning Investments, Inc. is currently seeking to buy homes in Houston and the surrounding communities, so if you’re interested in selling your property, please take a moment to complete our home sale form and a member of our team will be in touch.
If you’re seeking to acquire one of our properties or are interested in partnering with our wholesaling team, please stop by our properties page to view the available homes. Or, contact us today by calling 800.639.8410.