What is a Real Estate Short Sale
Example (Short Sale)
If a homeowners had purchased a home for $320,000 and paid $20,000 toward the principle, thus reducing the debt owed to $300,000. If the homeowner was unable to keep up with monthly payments and had to sell, and the current housing market was depressed due to current economic circumstances, and the highest offer the homeowner could receive for their home was $240,000 after fees. The mortgage company could agree to allow the short sale and transfer of title of the home thus producing a short sale of $60,000.
The simple answer is when you sell a home in which the amount owed to the lender(s) is more than amount that the home can be sold for. Instead of the owner of the home having to pay for the difference to complete the sale, the home sale is negotiated through the lender(s) by your REALTOR® in which the lender agrees to accept less than the amount owed to satisfy the loan allowing the home to be “paid off short”. In this example the short amount was $60,000.
With unexpected opportunities everywhere, now is the time to sell.
Sellers who think they are out of options can benefit from this dynamic real estate market. By evaluating an individual’s situation, we can recommend finance, tax, and legal specialists, suggest foreclosure avoidance assistance, alert homeowners of rescue scams, and explain the differences between a short sale and a foreclosure. A short sale could be the best option for a homeowner who is upside down on their home because a short sale may not hurt their credit as much as a foreclosure would. With a short sale a homeowner might qualify for another mortgage sooner vs a foreclosure.