I came across a blog on another networking site and got into a bit of a debate as to what exactly a Short Sale is and isn't.
I need to explain that I am a HRC (Housing Retention Consultant) with Titanium and I have the RDCPro (REO Default Certified Professional) Designation through RealEstateEducate.com lastly, I am working on a Short Sale training program I hope to present to NAR (National Association of Realtors) for acceptance in their Continuing Education Program. In other words, I kind of know what I am talking about, just a bit.
Ok, so back on topic, what is a Short Sale?
Per Wikipedia a Short Sale is defined as...,
"a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold."
The above definition is absolutely correct however, I have heard, read, and had described to me that a Short Sale is more than as described above by Wikipedia.
Some define a Short Sale as...,
a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold and, where the bank forgives the remaining debt.
Let me be very clear, a Short Sale is no promise that a bank will forgive the remaining debt!
I wrote a blog back on 9/8/08 on REOPro.NING.com that highlighted the use of unsecured promissory notes by banks to secure future payment of the remaining debt before they offer an approval for the short sale. In that blog, I made it clear that some banks are using the unsecured promissory note while others aren't.
In closing, a Short Sale approval doesn't guarantee a forgiven debt so be careful when you discuss what a Short Sale is so that you don't set an expectation that you simply can't fulfill.