Short Sales - The Basics
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the current homeowner. In some cases the difference is forgiven by the lender and in others the homeowner must make arrangements with the lender to settle the remainder of the debt. (National Assn of Realtors)
For example, if your mortgage is $200,00 but your home is worth $150,000, you are $50,000 short, not including the costs to close (commissions, recording fees, title and or escrow charges.) A negotiation process needs to take place to get the bank to agree to forgive the $50,000+ difference in the mortgage amount and to agree to pay all of the fees and costs to close the sale.
Because the costs and risks of foreclosure are so high to the lender (the average foreclosure costs the bank over $60,000) the lenders are now more readily willing to sign off on or accept the terms of a short sale.
Short Sales are extremely complex transactions and professional legal advise from a licensed attorney is always advised. We both require and offer a free legal consultation prior to listing your home on a short sale.
Our brokerage is a local leader in short sales. Even if you just need sound advice we have everything in place to help you with the entire process.