Short Sale FAQ – Part II – The Short Sale process
How a Short Sale works and is a Short Sale the right way for you to avoid foreclosure?

Q. Who signs the contracts for the realtor?

A. You need to sign everything as the property owner even if the property ends up as a short sale.

Q. Do I get a say in where to list the house for a short sale?

A. The opinion of the homeowner might be welcome, and in cases where you face a deficiency and the price might really matter to you what you say might even mean a bit more, but at the end of the day the listing price gets set by the bank.

Q. What if I think their price makes no sense at all and I strenuously object to it?

A. Since you sign the contracts you get veto power in a way, but the bank maintains the power to say if you don’t like their listing price the short sale deal is over.

Q. Who decides if an offer gets accepted?

A. It works just like the listing. The bank really keeps the final word, but you might end up with some input.

Q. What about all of the other costs associated with a standard real estate closing in a short sale?

A. Your short sale negotiation professional should try to be sure the banks or the sale proceeds cover everything.

Q. Can a friend or relative make an offer on my house?

A. Most times yes, but it may be looked at with more scrutiny.

Q. If a friend or relative buys my house as a short sale could they rent it back to me and let me live there?

A. If you’re lucky enough that someone would do that for you no one will object to that.

Q. Could the person who bought the home through a short sale proceed to sell it back to me at a price far below what I owed on the mortgage?

A. This option becomes stickier, first you need to watch out because in limited circumstances the debt you owed, including liens and junior mortgages, might come back to haunt you. From the bank’s point of view some will look upon this concept with great distain. A short sale works in a way because both sides end up with a bad situation, but it remains a better option than other alternatives. If you get the home right back as a part of the short sale the bank took a beating and you got away without paying your mortgage and kept your property, they could feel it’s not fair to them.

Q. Is this concept against the law?

A. No, but it flies in the face of what the bank wants to see. Remember too, if you get involved with any buyer who may not represent a true independent third party and you lie or misrepresent facts about the short sale purchaser to the bank even something that may not constitute a crime by itself may become fraud because of your false statements.

Q. What happens when the bank feels the short sale failed because the home did not sell?

A. In the short run they may decide to lower the listing price and try again.

Q. When they abandon all hope for a short what becomes the next step?