What Is A Short Sale?

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Real Estate Agent with Samson Properties 0225 093857

What is a Short Sale? This is the first of a six part series on Short Sale's.

What is a Short SaleA short sale happens when the lender is shorted on a mortgage, meaning the lender accepts less than the total amount that is due. If your mortgage is $100,000, but your home is worth, say, $90,000, you are $10,000 short, not including costs to close the sale such as real estate commissions, recording fees or title and escrow charges.

Sometimes, to avoid going through the costs of foreclosure, a lender will sanction a short sale by letting a buyer purchase the home for less than the mortgage balance while the home is in pre-foreclosure stage. A pre-foreclosure stage is one of the three stages of foreclosures.

Here are sample steps of a short sale:

     * Seller signs a listing agreement with a real estate agent subject to selling as a short sale with third-party approval.

    *The agent finds a buyer who makes an offer for less than the amount of the mortgage.

    *Seller accepts the buyer's purchase offer.

    * Seller's lender accepts the buyer's purchase offer.

 * Transaction closes when the buyer delivers the funds, the lender releases the lien and the seller delivers the deed.

Check out my blog on the 4 Qualifications for a Short Sale. Contact me if you have questions about the proccess.

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Rainmaker
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Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

This is good information for consumers. There are many people who do not know much about short sales.

May 16, 2011 12:35 AM #1
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Susan Jacobs

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