A short sale is for many people a strategy that saves them from foreclosure. A short sale occurs when a lender is willing to accept less than the full mortgage pay off. This is called “shorting the loan” hence the expression “short sale.” The lender absorbs the loss and forgives the Borrower’s debt.
So, for a homeowner who finds themselves in the unfortunate position of owing more than the home is worth, a short sale may a solution. Because of recent price declines in our Bradenton Florida real estate market, many sellers are in this position.
A home is a candidate for a short sale when all liens, plus costs of sale, exceed home’s value. These liens include mortgage liens, mechanics liens, tax liens, unpaid judgments, unpaid HOA fees.
Think of a short sale as a form of pre-foreclosure sale in which the lender agrees to accept less than the loan amount to avoid taking the home back in foreclosure. The good news is that the lender pays the closing costs, commissions, title fees, and repair costs. The seller gets the home sold, the loan satisfied, and avoids foreclosure.
When I am working with a Seller in a short sale situation they are happy to discover that my services are free. The lender pays all costs associated with the short sale, including my brokerage fee for service.
(Copyright © 2007 By Dan Forbes, All Rights Reserved.)
