Definition of an Active Short Sale

A short sale is selling a home for less than what is owed.

A short sale is also referred to as a pre-foreclosure. These properties are distressed, in danger of foreclosure and the lender has agreed to settle with the owner for less than the mortgage balance if the owner can affect a successful sale.

Types

Short sales are advertised as either "applied," "active" or "inactive." The marketing verbiage is geared more toward agents looking for a property for a buyer client, however, the status of the short sale is part of the public advertisement as well.

Significance

When a short sale is listed as "applied" or "active," the seller is accepting any and all offers, which he then forwards to the bank. The "applied" status means that while the seller's list price may be reasonable, that price has not been approved by the bank, so the offer may or may not be accepted. If a property is listed as "active," the lender has approved the asking price, and an offer acceptance is more probable.

Considerations

The seller does not have a say in the final approval of a short sale offer. The offer is forwarded to the bank, which can sometimes take as long as six weeks to four months to answer.

References

• Active Rain: Buying a Short Sale
• Financial Advices: Short Sale's: Non-Active Vs. Right Of Refusal
• Active Rain: Short Sale a Simple Definition