| SHORT SALES ______________________________________________________________________ |
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What Is A Short Sale?
A short sale in real estate occurs when the outstanding obligations (loans) against a property are
greater than what the property can be sold for. Short sales are a way for homeowners to avoid
foreclosure on their homes and still be able to pay off their loan by settling with lender. It is important to
remember that Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable.
In most cases it is not a settlement-in-full. A deficiency balance will remain as a potential liability for the
Mortgagor / Borrower.
Extenuating circumstances influence whether or not banks will discount a loan balance. These
circumstances are usually related to the current real estate market and the borrower's financial
situation. An important thing to know about a short sale is that it has to be handled by a real
professional who knows how to work these deals. Most REALTORS® don't even handle short sales.
The reason is that real estate short sales are a complex, tedious, and a time consuming task.
How Do I Short Sale My Home?
Step 1 - Verify the value of your property. If you are selling the property through a real estate broker, your
broker will provide you with an estimate of market value. If you are selling the property yourself, do your
own market analysis of the area and your property.
Step 2 - Add up all the costs of selling the property. If you are using the services of a real estate broker,
the broker will provide an estimate of closing costs. If you are selling the property on your own (for sale
by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs
will be.
Step 3 - Determine the amount owed against the property. This will be the total of all loans against the
property.
Step 4 - Do the calculations. Subtract the total amount owing against the property from the estimated
proceeds of the sale. On a short sale, this will be a negative number.
Step 5 - Contact the lender or lenders. Talk to someone in the customer service department and tell
them the situation. They may direct you to a specific department. Talk to a supervisor or manager if
possible; this person will have more authority.
Step 6 - Ask the lender what its procedures are for a short sale. Some lenders are willing to work with
you by reducing the amount owed or making other arrangements. Others will look to the agents
involved (if any) or anyone else who's making money off the transaction to see if they are willing to
make concessions to make the transaction happen. Still other lenders will tell you that your debt is your
responsibility, one way or the other.
Step 7 - Sell the property.
A short sale in real estate occurs when the outstanding obligations (loans) against a property are
greater than what the property can be sold for. Short sales are a way for homeowners to avoid
foreclosure on their homes and still be able to pay off their loan by settling with lender. It is important to
remember that Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable.
In most cases it is not a settlement-in-full. A deficiency balance will remain as a potential liability for the
Mortgagor / Borrower.
Extenuating circumstances influence whether or not banks will discount a loan balance. These
circumstances are usually related to the current real estate market and the borrower's financial
situation. An important thing to know about a short sale is that it has to be handled by a real
professional who knows how to work these deals. Most REALTORS® don't even handle short sales.
The reason is that real estate short sales are a complex, tedious, and a time consuming task.
How Do I Short Sale My Home?
Step 1 - Verify the value of your property. If you are selling the property through a real estate broker, your
broker will provide you with an estimate of market value. If you are selling the property yourself, do your
own market analysis of the area and your property.
Step 2 - Add up all the costs of selling the property. If you are using the services of a real estate broker,
the broker will provide an estimate of closing costs. If you are selling the property on your own (for sale
by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs
will be.
Step 3 - Determine the amount owed against the property. This will be the total of all loans against the
property.
Step 4 - Do the calculations. Subtract the total amount owing against the property from the estimated
proceeds of the sale. On a short sale, this will be a negative number.
Step 5 - Contact the lender or lenders. Talk to someone in the customer service department and tell
them the situation. They may direct you to a specific department. Talk to a supervisor or manager if
possible; this person will have more authority.
Step 6 - Ask the lender what its procedures are for a short sale. Some lenders are willing to work with
you by reducing the amount owed or making other arrangements. Others will look to the agents
involved (if any) or anyone else who's making money off the transaction to see if they are willing to
make concessions to make the transaction happen. Still other lenders will tell you that your debt is your
responsibility, one way or the other.
Step 7 - Sell the property.
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