Profile picture for astro572

If my house sells for less than we owe....and we hold a promissory note for the difference...is it t

  • November 01 2012 - Longwood
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Answers (2)

Agreed.. Anytime you want to sell the property for less than what you owe, it is a SHORT SALE and the offer must be approved by the lender. Also the difference in the balance you are responsible for needs to be negotiated with the lender for forgiveness. 
  • December 16 2012
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Profile picture for Connie Klemme
that would be a short sell.
In a short sale there are one of two options.

1.  The seller has to bring cash to closing to cover the deficiency (plus all the closing expenses).

2.  The seller has to seek approval from their lender to accept a short sale term and work with them on more specific details- which could involve more time and possibly forgiving of the balance or it could involve a judgement being placed on the seller for the difference. 

Short sales have been more common in the past few years and they are less "painful" for agents and buyers than previously since lenders now have departments for them but they are still not quick and not quite the rose garden for sellers that might be pitched to you by someone wanting to handle the transaction.  So it is best to visit at length with an uninterested party like a lawyer or financial advisor before going for a short sale.
  • November 01 2012
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