Due to the current economic climate, in Canada, there are an increasing amount of foreclosures and bankruptcies. However, for the home seller there may be another option besides foreclosure if the seller has or is about to default on their mortgage. A short sale occurs when the selling price is less than the amount owing on the property. This situation can occur if there are encumbrances that cannot be covered by the proceeds of the property or if there are other debts which when combined with the mortgage, exceed the sale price of the home. It is important to remember that a short sale can only occur with the cooperation of creditors. Creditors have to be willing to pursue a short sale instead of pursuing foreclosure. As such, if a seller is expected to default on their mortgage it is recommended that they contact their creditors find out their options and/or contact a real estate lawyer experienced with short sales.
As always, visit my Calgary Real Estate website for further information regarding the Calgary Real Estate market.
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