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VH-HA
Posts: 1
Registered: ‎07-22-2008
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WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???

WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???
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foundonelostit
Posts: 15
Registered: ‎07-23-2008
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Re: WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???

Short sales are when the seller is trying to sell the house for less than what they owe to the bank.  It's just one way for them to try and get out of the house before a foreclosure.  They can be pretty sticky sometimes because there's a lot of paperwork on the sellers side that has to be approved by the bank.  A lot of times I've found that the seller will list the house really low just to get foot traffic and offers before the short sale has even been approved.  Even when you make an offer, it has to be accepted by the seller and then submitted to the bank for them to accept.  If the seller has more than one mortgage, each bank has to accept.  Depending on the agent, it can be a quick sale or take up to a year.  We have an agent that has been through short sales in the normal 45 days and some that are still going at 7 months.  Don't be discouraged if you really love a place but it's a short sale.  You might just have to wait longer to get it.  One thing to make sure and ask is how far along they are in their process.  Then you'll have an idea of how long you have to wait.
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sutitbor
Posts: 23
Registered: ‎04-22-2008
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Re: WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???

Short pay is another term for short sale.  Meaning that the seller is selling the house at a loss to the bank, the bank is forgiving the debt to the seller. 
What this means to you as the buyer is a longer turnaround for acceptance of your offer and your offer will have to be approved by the bank.  Add an additional 6-8 weeks to the home buying process.  If this timetable is ok, then you can get a great deal.
For us Realtors, it means a few extra forms and lots and lots of patience :smileywink:
Rob
Rob Titus
Rob@RobTitus.com
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patstarr
Posts: 7
Registered: ‎06-02-2008
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Re: WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???

It means the listing price was simply pulled out of the air and the seller/listing agent have no idea whether the lender will accept it as payment in full for the loan. As a buyer in this market for about 6 months now, a pattern I see over and over is that unscrupulous listing agents will list short sales on the MLS at riduculously low prices that the lender would never accept as a marketing tool in order to drum up buying leads so they can redirect them to their other listings. So I specifically look for the language along the lines of "lender approved pricing" somewhere in the property description before I even bother probing it further.
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Aram1
Posts: 22
Registered: ‎10-21-2010
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Re: WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???

[ Edited ]

You employed excellent strategy.

 

 

Aram Arakelyan

Broker

DRE# 00935078

www.housevaluecheck.com

Contributor
Aram1
Posts: 22
Registered: ‎10-21-2010
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Re: WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???

[ Edited ]

Good advice.

 

 

Aam Arakelyan

Broker

 

Gold Regular Contributor
Andiamo53
Posts: 2,084
Registered: ‎07-12-2010
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Re: WHAT DOES SHORT PAY/SUBJECT TO LENDER MEAN???

Don't remember where I heard this but supposedly banks will never accept anything below 70% of the outstanding mortgage. So, one way to tell if the listing price is reasonable is to look at the sales data. Very often you will see that the house has been sold in the last five years. Just take 70% of that price--if the current listing price is higher then there's a good chance you're in the ballpark.