Below please find the dictionary definition of a Short Sale. Our office and agents have seen great success with this method of real estate investment. Many consumers were sold homes and given mortgages that they weren’t financially equipped to handle. A short sale is a proven method for getting these homeowners out of a default situation and granting them “peace of mind”. Once a short sale is complete, our agents work with the sellers to find them homes in their desired neighborhoods, school districts and of course price range.
A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property. In a short sale, the lender (mortgage bank) agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor (borrower). The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Most Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable. In 99% of all cases it is not a settlement-in-full. A deficiency balance will remain while the mortgage broker, real estate agent / broker, loan officers, title and closing agents still remain getting their profit. And no regulatory agency governs this hybrid transaction.