How does a short sale work in NY?
An NY short sale is the sale of real property where the amount of proceeds from the sale isn’t enough to cover the amount of a mortgage or other debt on the property. This leaves the bank or other lender holding outstanding debt from the sale, but prevents a foreclosure action.
How long does a short sale take in NY?
If, by chance, you’re able to beat out the competition without offering too high a price, you’ll still have to wait on an approval from the bank. And, that approval may come in a week or it may come in six months—if it comes at all.
What are the steps in a short sale process?
- Step 1: Engage Professionals & Pre-Negotiation.
- Step 2: Property Listed, Marketed & Sales Contract Submittal.
- Step 3: Short Sale Package & Submittal to Bank.
- Step 4: Lender’s Review.
- Step 5: Lender Response & Submittal to Buyer.
- Step 6: Short Sale Closing.
- Step 7: Post-Closing.
How do you get approved for a short sale?
Gather the necessary documents for approval. Lenders typically require financial documents, such as your pay stubs, proof of unemployment, prior-year tax returns and bank statements. Proof of hardship will be required. Gather all your bills, such as medical expenses, that support the need for a short sale.
How long does short sale approval take?
A short sale can take up to six months to be approved because many factors can slow the process down. You might be able to reduce the time it takes to be approved by asking your agent for some information before making an offer.
Who pays the closing costs on a short sale?
In a short sale transaction on the other hand, the seller’s closing costs are usually paid out of the money the buyer brings to the closing. Normally, the seller’s lender must approve all of these seller closing costs before a short sale can be approved and completed.
Will a bank accept a short sale offer?
Many underwater sellers are worried that their banks may reject a short sale when the truth is, if the seller and the property qualifies, most banks will readily approve a short sale.
Do banks finance short sales?
When it comes to short sale financing, banks will only agree to the sale if they believe the transaction can be more profitable than a foreclosure. Yet, most banks will not evaluate the seller’s request for a short sale until there is an offer on the table.
Why would a short sale be denied?
A short sale is sometimes denied due to something as simple as the seller being current on paying their mortgage. The bank’s guidelines might state the bank isn’t allowed to approve a short sale if the mortgage payments aren’t in arrears.
Do short sales have to be cash?
The short sale process is a lot like buying a home off the market. You’ll start by finding a house and getting pre-approved for financing (unless you’re paying in cash). Then you’ll make an offer, negotiate the sale, and close.
