Please describe what is a short sale?
(0) | asked by: Louis Truj | share | 18 months ago | Report
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SHORT SALE GET ADVICE ABOUT SHORT SALE A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner/borrower cannot afford to repay the liens/mortgage full amounts. The lien holders then agree to release their lien on the real estate and accept less(short) than the amount owed on the debt. In the mortgage space, this means the homeowner (the borrower) cannot recover the amount of unpaid principal he owes the lender by selling the property, and the lender concedes to taking the loss. Any unpaid balance owed to the creditors is known as a deficiency. Short sale agreements do not necessarily release borrowers from their obligations to repay any shortfalls on the loans, unless specifically agreed to between the parties. Sometimes (depending on the bank) the bank/Lien holder might offer some relocation assistance to cover some of the costs of moving to a new place once the sale has concluded, even on some investments properties the bank will offer the relocation assistance to the tenants. There are a lot of variables that short sales take a lot of time to close, sometimes up to a year, to name a few the borrower has to be in a serious financial hardship for the short sale to be approved, the bank has to submit all documents to the lien holder and wait for an answer, as well as to request an appraisal to gather the real value of the house versus the amount owed by the borrower. Let me know if you have any other questions. FERNANDO MELENDEZ
When a homeowner owes more on a property than its current market value and is "upside down" on their mortgage, it would really help to Short Sell the home. This type of sale differs from a foreclosure and may help sellers avoid potentially serious consequences. Since misconceptions about these sales are quite common, buyers can also benefit from learning about them. So what is a Short Sale? A short sale is one possible way to remedy an upside down mortgage. In this scenario, the homeowner and mortgage company or companies negotiate a sale for less than the full balance of the loan at closing. A buyer closes on the property and the property is ‘sold short’. This option may not be for everyone, as eligibility depends on an owner's: -financial hardship (i.e. job loss, injury, or other factors that may have changed since the loan was written that affect ability to pay) -disposable income -inability to realistically pay off the debt It is important to realize that this type of sale can take longer to finalize because third-party acceptance is needed in addition to the buyer’s offer. Furthermore, the property tends to sell for as close to market value as possible so sellers do not stand to make a profit.
Hi Louis, a short sale is a property for sale at a price lower than the amount owed on the mortgage, and market value is lower than the amount owed - the proceeds of the sale will not cover the debt. The seller possibly bought the property when prices were high! The lender needs to agree to receive a lower payoff on the note. If there are other debts secured by liens against the property, all lien holders have to agree. The lender will verify that the homeowner cannot pay monthly loan payments, or doesn't have enough money to pay the full balance. The short sale is a solution for homeowners that can no longer pay their mortgage, need to move, or have received a notice of default from the lender (first step of foreclosure) and want to avoid foreclosure. A short sale has a lower impact on the credit score than a foreclosure. For a buyer, a short sale can be advantageous - will buy a property at or below fair market value, but in most cases the lender will not pay for repairs and other extras (closing costs, HOA transfer fees, others). Either a seller or a buyer, I recommend to work with a real estate agent that is knowledgeable and pledges to "fight" for you. Please feel free to contact me for details.
In everyday terminology, A short Sale happens when the price to Sell the property is less than the balance owed on the property. The Bank has to agree to accept less than the balance owed on the property to complete the Short Sale transaction. This could be a way for the Seller to get rid of the property without having A Foreclosure on their credit report. The Buyer could be A winner by obtaining a property for less than market value. I hope this clarifies the term Short Sale. Good Luck!
A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.
Hi Louis, in summary and copied from the dictionary: A short sale is a sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.
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