This blog has previously discussed short sales and how they can help Blacksburg, Virginia, homeowners and owners of other property avoid foreclosure and the financial consequences associated therewith.
To summarize those previous posts, a short sale is basically a process by which a homeowner sells their property for less than what they owe on the property. However, the bank agrees to accept the proceeds from the sale in full satisfaction of their loan and to write off the balance owed.
The process is more complicated than a conventional sale of a home and involves a number of potential legal consequences.
For instance, one of the big differences between a short sale and a more typical sale of a home is the fact that the seller’s lending institution is going to have to approve of the short sale. Otherwise, the sale of the home would make little sense to either the seller or the bank.
As in the case of other sales, the initial step in a short sale is for the seller to list the property and find a willing buyer. In this respect, some real estate agents intentionally try to solicit multiple offers in order to present the best possible application for a short sale to the bank.
Once there is a willing buyer, the sale will be proposed to the bank, which will review whether it wishes to accept the short sale. Submitting a proposal to the bank can be a complicated and daunting process, as the bank is going to want to know both the value of the property and its prospect of the seller’s being able to re-pay the bank’s loan. The bank could want income information from the seller as well as an appraisal of the house.
Even in the best case scenario, getting the bank’s approval for this type of real estate transaction can take some time, but an experienced Virginia real estate attorney may be able to help navigate a client through this process.