Record number of foreclosure are hitting the home market and many of these are being purchased before the property goes to auction this is called a short sale.
A short sale is one in which the PURCHASE CONTRACT has been negotiated by the buyer and the seller (owner of record) but has a condition in the contract which gives the right to change or dictate terms of the contract to a third (3rd) party (normally the lien holder).
The third party can change price, conditions, and time of sale. If they think that the price is not enough to cover their cost they may ask for an increase in the price of the sale. They may determine that they will not pay for the termite inspection, home warranty etc. The conditions demanded by the third (3rd) party may be advanced at any time during the process but will usually be forth coming in the last days of the sale.
You may negotiate with the third (3rd) party. If you do not agree to the terms that are ask, you may negotiate for a better position or you can cancel the contract and retain your earnest money.
A Short Sale got its name due to the relationship between the owner of record and a third (3rd) party. The length of time for a Short Sale to be consummated may be as little as two weeks or it can last for many months. The length of the escrow may be controlled by the court in the case of a filed Bankruptcy but is normally dictated solely by the third (3rd) party. The buyer has limited control.
