A short sale is a conclusion to a mortgage loan that neither the borrower nor the lender expects or aspires for. If, under any circumstances, the borrower does feel that short sale is the only option and he approaches the bank with a buyer, who is ready to buy the property, albeit at a lesser rate than what is owed, the bank might not immediately agree to the request. This is because the bank itself will indeed incur certain losses as far as the loan or interest component is concerned, and hence a short sale is always explored by the bank as the last option. The loss mitigation department of the bank, which takes care of such issues and related documentation, normally takes a long time to decide whether short sale is the best option under the given circumstances.
In case you are the borrower and hence the seller, there are a few facts that the lender might always be not too willing to share with you as far the short sale process is concerned. He might not be ready to respect any timelines as requested by you, and would even end up deferring the entire process. While you might have searched high and low and got a buyer for your property, the lender might not be as keen to get the sale done. The lender shall also not be willing to divulge certain information such as the market rate expected of the property or the margin that he is expecting from the sale. The delay might even end up turning away the buyer, as he would feel that this process is taking too long a time. Some other information that the lender might not be willing to divulge are related to closing costs, wherein he might not be too keen to take care of closing costs of the buyer.
In case you happen to be on the other side of the business, by being the buyer, that can create a time lag, as the lender might not process the application too fast. Also, he might not have an idea regarding the exact situation of the property and it will be left to you to find out if the property is worth the amount that you are ready to pay for it or if it has any sort of legal or other attachments related to it. You will have to depend on your own resources or the seller in such cases, as you cannot expect any assistance from the bank. These conditions make the short sale an extremely unpleasant process for all those associated with it and hence do not find many takers.
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