Short Sale

You should have been with me on saturday, I met with two homeowners who are upside down and behind in their payments to discuss the sale of their homes (both are listing with me)

Briefly...A short sale is a sale where the seller owes more on the house than the house is worth, and the holder of the underlying mortgage agrees to accept a loss

A short sale will not be approved by the mortgage holder if the seller has sufficient income to make their payments or sufficient  assets that can be sold to make them whole

for a more in depth discussion read this article

 

 

Basically, a short sale is a sale which occurs when the seller doesn't have enough equity to sell the property nor does the seller have the extra funds needed to bring to the table.  The mortgage company then can approve a short sale where they either forgive or make other arrangements with the buyer for the shorted portion of the sale.  The mortgage company must approve the sale.  The buyer must provide full financial disclosure to the mortgage company, in some cases write a hardship letter and the mortgage company will order a BPO to determine value.