Real Estate Buzz, Short Sales
What is a Short Sale?
June 18, 2009 by admin · Leave a Comment
A short sale is the process of selling a home for less than what is owed to the mortgage company or lien holder. The home is initially listed for sale by a Realtor until an offer is obtained. At this point, the offer is either accepted or rejected by the seller. If it is accepted, the offer is forwarded to the lien holder for review. The lender has to approve the sale in order for the sale to close.
Items the lender typically requires are:
- A hardship letter
- Financial statements (expenses and income)
- Bank statements
- A brokers’ price opinion on the property
A short sale is often a good alternative to a foreclosure, but it does have consequences. The seller’s credit will be hurt, the “short” amount counts as income if it is not a primary residence, and the lender can potentially seek a judgment for the “short” amount in the future. Despite these consequences, a short sale has far less repercussions than a foreclosure and is typically the best alternative for both the seller and lien holder.
