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You are here: Home / Home Buying / Short Sale Mortgages: What Are They?

Short Sale Mortgages: What Are They?

March 26, 2021 By Ralph Gates

A short sale is a home that is on the market, likely at a discount. It’s a way for the seller to avoid a foreclosure, and for buyers to find a bargain. When you make an offer on a home that is listed as a short sale, it is important to understand that the lender of record must approve the sale price. A homeowner under financial distress that owes more for a mortgage than the home is worth might consider a short sale.

Getting Your Short Sale Mortgage

Buying a short sale is all about timing. You will want to have pre-approval for a mortgage before you make an offer so that you know exactly what you can afford. It takes longer to purchase a home through a short sale than it does to purchase one traditionally. As the buyer, get your finances in order and be prepared to wait as the deal goes through.

Understanding the Short Sale

It will help to work with a mortgage lender that understands the short sale process. Both the seller and the lender are losing out financially, and it takes some negotiation with the lender for most deals to go through. The buyer doesn’t have to do anything different when buying a short sale, but usually needs to wait longer for the house closing to go through. A seller that is underwater on their mortgage and wants to avoid a foreclosure is a good candidate to sell their home in a short sale.

Find a Good Real Estate Agent

When you are looking for a home that is offered in a short sale, your real estate agent is essential to the process. Find a real estate agent that you feel comfortable working with, and who can explain the short sale process to you. It is important to uncover if there are any lienholders on the property you want to purchase, and uncover how much the seller owes the mortgage company for the property.

Get the Home Inspected

By purchasing a home through a short sale, you are buying the home “as-is”. It is vital to get a thorough inspection done on the home so that you know what you are getting into. A home listed for short sale is often in better condition than one in foreclosure, but an inspection is the only way to know about any problems. Once you make an offer on a short sale, you don’t get to negotiate a lower price if the inspection goes poorly. The seller is supposed to let you know if there are any issues with the home, but this may not be the case.

Lienholders and the Closing Process

If there are lienholders involved with the property, the closing process takes longer. Each lienholder will need to release their hold in order for the sale of the home to go through. Although the lender may accept the sale price, an analysis must be done to make sure the home is worth less than the seller owes on the home. In addition, the seller must show that they are in financial hardship, including proof of income, assets and tax forms. The closing process takes longer than a traditional closing to ensure that all lien holders are taken care of and the property can be cleanly transferred to you, the new owner.

At Mid-America Mortgage, we work with all types of buyers, including those interested in purchasing a home offered for short sale. Learn more about the short sale process and how we can provide you with the mortgage services you need. Contact us today at 573-875-1100 and see what your options are.

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Filed Under: Home Buying

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Mid America Mortgage Services, Inc, NMLS #1142067
200 E Walnut St.
Columbia, MO 65203

Phone: (573) 875-1100

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"I’m a very loyal customer at Mid America Mortgage Services, Inc. I have an addiction to building houses and designing them, and they are always right there with me every step of the way helping me get the best loan product and the best rates whenever I am ready to build. They make sure you don’t get a loan that you can’t afford. The whole process was very smooth. I would recommend Mid America Mortgage Services, Inc to anyone because they are always there to teach you, help you, and make it easy for you every step of the way."

Kate

"I have had mortgages since 2004 in Columbia and have gone through a couple of banks, but over the last several years, the last couple of houses have been with Mid America Mortgage Services, Inc. Michelle has told us many times, 'I am not going to put you in a situation I am not comfortable with you being in, regardless of what it means for our company'.

Heidi always has a smile on her face and when you walk through the door, they recognize you and say “Hi”. I definitely recommend anyone who is in the home buying, purchasing, refinancing, upgrading business to go to Mid America Mortgage Services, Inc, ask for Michelle because they are going to be the best person you can work with."

John

"My family owns Tiger Ice Company. My experience with Ralph at Mid America started with Tiger Ice because we needed to expand our facility. When we went in to talk to Ralph at Mid America, he pretty much was straight up with us and told us we needed to go back to the drawing board. We came back with new numbers and a new plan, and we built the facility and everything was fine. Our dream of that would not have been possible at all without Mid America Mortgage Services, Inc and Ralph. They don’t tell you what you want to hear, they tell you the truth and that's what we weren't getting from other banks."

Andy

Michelle, I want to thank you for all of your efforts on the loan. I never knew how much information the needed! I appreciate your personal nature and ease of working together. Thank you for making this happen! :)

Amy

"They really explained the process to us very well and made us feel very comfortable, specifically Jeanie Byland. I have never asked a question that I felt dumb about. They really wanted to educate us and have been fantastic. The interest rates changed one day and they called me to say, ‘Hey we might ought to look into refinancing your loan’. I really felt like they had our best interest at heart."

Steve

"When we were 18 and 19 years old no one wanted to help us get started. But Michelle took us under her wing 6 years ago next month. There is a lot of people out there that could of taken advantage of us many of times because we had no idea what was going on. For Michelle to stand beside us and walk us through, and not let us get into something that could get us in a lot of trouble means the world. We thank Michelle and we are extremely blessed to be able to work with her and her team. I have never even thought about talking to another lender and will always be loyal to Mid America Mortgage Services, Inc."

Cody and Morgan

"One of the main things that I loved about Michelle was she was so organized. She would meet us at any location she needed to, and to be honest she had the absolute lowest interest rate. They were always very transparent with fees so there were no surprises. Michelle was always super easy and we would always run in talk to her even it was for a few minutes. The best thing was the process was very, very smooth."

Chris and Jamie

Selling our home of 17 years and building a new home was a very emotional time for our family. We were ready for the next adventure in our lives but knew there were numerous steps involved. The search for a mortgage officer was simple, Michelle was our choice. Her guidance and knowledge made the process as easy as possible. When we had questions, she was always there to give us an answer and discuss our options. The employees of Mid America Mortgage Services, Inc like Michelle will keep us returning for our mortgage needs.

Chad and Julee

"My wife and I have moved around quite a bit with my job so we have been through the process before, but we have never had anybody help us as much as Michelle West Mid America Mortgage Services, Inc did. We needed a loan for a new construction home and they were able to help us out with all of our needs and make us feel comfortable with what we were doing moving forward. They did a good job of walking us through the paperwork to make sure that we were pre-approved for a certain amount."

Jason

"I knew Jeanie Byland for a long time. She made the process so easy. One of the things I probably appreciated the most was that she didn't want to spoil the excitement of closing on a new house by showing up on closing day finding out that we owe a lot more than we thought. They were upfront with that information right from the get-go, and that’s because it’s just like they say, ‘They wouldn’t put you in a loan that they would be comfortable taking themselves.’”

Jamie


Phone: (573) 875-1100
200 E Walnut St, Columbia, MO 65203

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