What is a Short Sale, Basics about Short Sales for Homeowners

Real Estate Agent with Keller Williams Preferred Realty

Ask Realtor About What A Short Is"What is a Short Sale?" - Over the last few years I have helped a lot of homeowners avoid a costly judicial foreclosure by facilitating a short sale on their behalf. Because this is such a norm in our market today and the term short sale is so widely used I sometimes forget that homeowners and potential buyers don't know what a short sale is. I thought it would be helpful to provide an explanation on short sale and the definition of a short sale as it pertains to real estate in todays market. 

There are multiple types of short sales and they all have their own individual subtleties but the general process of a short sale is the same. For the purpose of this blog I will discuss the traditional short sale. If you would like to know more about other types of short sales including HAFA, cooperative short sales as well as other options please visit the website I listed at the bottom of the page. 

The term short sale is also known as a short payoff but it is not commonly called that. A short sale is when a homeowner sells their real estate (home, condo, lot, business etc.) to a prospective buyer for less than the amount they owe on the debt most commonly a mortgage to the bank the homeowner received a home loan from. In order for a homeowner to sell their property as a short sale they would have to get written approval from any third party that holds a lien on the property which is most commonly a mortgage, bank or servicer. A lien is the legal right of a person or entity to secure a debt and in real estate it is a way for a mortgagee or servicer to use your property as collateral for the loan. 

Here is a basic example of a short sale: 
Mortgage Amount: $300,000 
Current Value of Home: $220,000 
Cost to Sell: $15,000 
Total Net After Sale: $205,000 
Loss to Mortgagee (bank): $95,000 

The above example shows a loss to the bank of $95,000 which will have to be approved by your bank, lender or servicer. Short sales are common place in our market today and it is common to see losses exceeding $100,000 or more. Short sales are complicated transactions so it's important to have a real estate professional that is experienced with short sales. Our services will handle all aspects from start to finish making your involvement as simple as possible. In addition, our fees are at zero cost to you and part of our team includes experienced real estate short sale attorneys that can give you legal guidance at no cost. Our costs are paid upon successfully completing the short sale and are rolled into the loss to the bank. Banks and servicer's know they will have to pay a Realtor and attorney to sell the property if they take it over as a judicial foreclosure so they have no problems paying those. See links below for more details on short sales and your options.

Please contact 
Raymond Kennedy at 708-620-4460 for more information. 

More Details On Short Sales, Learn All Aspects of Short Sales
Short Sale Process 
Short Sale Qualification 
Tax Liability on Short Sales 
Short Sale Benefits 
Short Sale Incentives 
Hardships for Short Sales 
Timelines for Short Sales 

Raymond Kennedy
Keller Williams Preferred Realty
Illinois Real Estate Broker
Direct: 708-620-4460

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