Northern Virginia Buyers & Sellers Ask: What is a Short Sale?

By
Real Estate Agent with Long & Foster REALTORS®, Manassas, VA VA License # 0225089470

Northern Virginia Buyers & Sellers Ask:  What is a Short Sale?

The Northern Virginia marketplace has changed since I first entered real estate in 2005.  At that time, buyers could choose between new construction or a resale property.  Very rarely did we hear about Foreclosures.  Unknown to most was the Northern Virginia Short Sale.

A Northern Virginia Short Sale occurs when a home seller owes more than they will make for the sale of their home.  For instance, if market value of a home is $350,000 and the seller owes $500,000, the mortgage company is being asked to forgive the $150,000 short fall.  This short fall is where the term Short Sale comes from.  It's certainly not from the length of time the sale takes.

Because a Northern Virginia Short Sale involves getting the Seller's Mortgage Company to approve the short fall, the entire sale is dependent on the mortgage company's "Third Party Approval."  It can take anywhere from two weeks to four months just to get mortgage company approval from one lender.  And Northern Virginia Short Sales often involve multiple loans on the Property that must approve the Short Sale.  The good news is that as more and more banks are preferring Short Sales to Foreclosure, and increasing the staff to deal with them, the time lines have definitely shortened. 

After approval, the Buyer will need to get a home inspection, appraisal and financing approval.  Hopefully, the Buyer has waited and is ready to roll.  Losing Buyers to the length of a time a Northern Virginia Short Sale can take is not at all uncommon, but completely avoidable with regular communication from the Listing Agent and insisting that the Buyer's Earnest Money be deposited at Ratification, NOT upon written evidence of Third Party Approval.

Surprisingly, a Northern Virginia Short Sale can be approved in writing by the mortgage company, and still not be considered approved by the terms of the Northern Virginia Regional Sales Contract.  That being said, a Northern Virginia Short Sale doesn't have to meet the guidelines of Northern Virginia Regional Sales Contract's definition of approval to go to settlement.  The Buyer and Seller must simply be willing to move forward with the terms of the approval given by the mortgage company in writing. 

Northern Virginia Short Sales are time consuming and test the patience of the Seller and Buyer.  It is ill advised to enter into a Northern Virginia Short Sale without a competent and experienced agent.  Read more about good Northern Virginia Short Sale Listing Agents and good Northern Virginia Short Sale Buyer's Agents by clicking the appropriate link.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Anne Clark 07/01/2010 12:17 AM
  2. Ellie McIntire 01/10/2011 12:09 PM
Topic:
Real Estate General Information
Location:
Virginia Prince William County
Groups:
Virginia Foreclosures Short Sales and REO (and Pre-Foreclosures)
Short Sales Specialists
Short Sale REALTORS®
Tags:
northern virginia short sales
northern virginia short sale listing agent
gainesville va short sale listing agent
bristow va short sales

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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Another successful Short Sale transaction has closed.  This time in Dominion Valley in Haymarket, VA.  Click this link for details.

Nov 07, 2010 12:14 PM #1
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Another successful Short Sale transaction has closed.  This time in Coles Run Manor in Manassas, VA.  Click this link for details on the sale.

Nov 07, 2010 12:16 PM #2
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Another successful Short Sale transaction has closed.  This time in Village Place in Gainesville, VA.  Click this link for details on the sale.

Nov 07, 2010 12:17 PM #3
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Another successful Short Sale transaction has closed. This time in Four Winds in Oakton, VA.  Click this link for details on the sale.

Nov 07, 2010 12:20 PM #4
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Donna Foerster
Cherry Creek Properties, LLC - Parker, CO
Metro Denver Real Estate Agent

The most important thing to remember when you are the seller of a short sale listing, or the buyer, is to work with a professional who has experience working with short sales.  Good information Chris Ann!

Jul 16, 2011 10:58 AM #5
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Chris Ann Cleland
Long & Foster REALTORS®, Manassas, VA - Bristow, VA
Associate Broker, Northern VA

Donna:  Very true.  I was on the phone with a listing agent just yesterday telling me his Short Sale was "approved in Equator."  The futher in the conversation I get out of him, "I've got it ready for a contract in Equator."  BIG difference.

Jul 16, 2011 01:21 PM #6
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Chris Ann Cleland

Associate Broker, Northern VA
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