What is a short sale?
In a nutshell, a short sale is selling the home for less than what is owed on it, commonly at fair market value. Or, what the lender has calculated to be fair market when factoring in possible future losses. Fact: It doesn’t matter how much or how little you own on the property. Your lender will entertain a short sale package when it is compiled correctly and directed to the correct loss mitigation department within the lenders financial institution.
In a short sale, the lender agrees to settle the mortgage debt that is owed on the property for less than the full balance. In this scenario, the seller sells their home on the open market for market value, walks away from the property with no debt, pays no commissions and no closing costs, and is able to avoid foreclosure and save their credit.
• From Wikipedia: “A short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This processing is all done through communication with a bank’s Loss mitigation department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower’s financial situation. A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages i
A short sale is when an individual makes an offer on a house that is less then what is currently owed to the bank. Generally, an investor will offer the bank 80 cents, or 90 cents on the dollar and purchase the property directly from the seller. The Seller of the property generally can NOT receive any funds from the closing. After closing on the property, investors generally will fix up the property and sell for a profit.
