Q: Explain how a Short Sale works & how long process takes after you get a buyer?
A: A short sale occurs when the seller owes more on the property than a sale will provide. As such, the seller is “short” and does not have enough to pay all expenses, including the bank’s lien (the mortgage). The contract of sale will include a provision that the deal is conditioned on bank approval, and all parties must be advised that this approval is necessary. Typically the seller is given 60 days to complete the approval process, and seller counsel must work with the seller to provide the necessary forms to the bank to approve it. Be sure to use an experienced attorney when attempting a short sale. There will be a negative impact on your credit score if the short sale is approved. There are also potential tax consequences so you want to make sure to speak to an accountant.