This one topic drives me bananas because I run into it just about every day of the week.
A short sale is the sale of a home for less than is owed the bank. In order for this to take place, the lender has to approve the contract which is between the buyer and the seller. Not the buyer and the seller and the lender.
It amazes me to no end that so many agents do not understand this fact, and the contracts that I receive for my sellers frequently contain language referring to the short sale approval that is irrelevant to the purchase contract.
The real estate agent’s job is to market and sell your house. The role of short sale negotiator (who is quite often your real estate agent) is to speak on your behalf to your lender to ensure that the offer that you’ve been advised to accept will cut the mustard, so to speak. The benefit to you is that you don’t have to spend time on the phone (and I mean lots of time) dealing with incompetent bank employees in the midst of your current financial crisis, and that it most likely won’t cost you a cent to have this done for you.
Regarding the terms of the purchase contract in a short sale, the lender is no more a party to the sale of the home than an inspector or appraiser is party to the sale of the home. The relationship between the seller and the seller’s lender is one by which the seller is asking their lender to allow them to pay off the loan without recourse for less than the amount that is owed. This is called settling a debt, and leads to debt forgiveness, but the two agreements can be looked upon as separate agreements.
One agreement involves the terms and conditions between the buyer and seller, and one agreement involves the terms and conditions between the seller and the seller’s lender. Each agreement can sway the terms of the other, but they are not connected.
