What is a Short Sale?
What is a short sale? Realtors hear that questions all the time.
Let me be upfront with this subject... There is nothing short about a short sale. A typical short sale could take 6-9 months to complete from Listing Agreement to Close. For those that have the patience to complete them it usually is a good deal for both parties involved. Sellers get to avoid foreclosure and major credit damage, and Buyers usually get a property for 10-15% under market value.
So what is a 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 cannot afford to repay the liens' in full amounts. The lien holders then agree to release their lien on the real estate and accept less than the amount owed on the debt. In the mortgage space, this means the homeowner cannot recover the amount of the unpaid balance they owe 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 the borrowers from their obligations to repay any shortfalls on the loans, unless specifically agreed to between the parties.
A short sale is often used as an alternative to Foreclosure because it mitigates additional fees and costs to both the creditor and borrower. Both often result in a negative credit report against the property owner, but the short sale doesn't impact the credit report as heavily as the foreclosure.
As always if you or someone you know is upside down on the mortgage, give us a call. We are more than happy to sit down and answer any and all questions.
Blake Roussel - 501-230-6082 or firstname.lastname@example.org
Rhonda Bletsh - 501-730-8980 or email@example.com