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Answers (2)
- Mike Linkenauger, "JacksonvilleRealtors"
- Contributions:235
Our government estimated that by years end 50% of Americans who have a mortgage on their home will owe more than the value of it. When a homeowner MUST sell, and doesn't have the assets to pay for the deficiency, then a short sale, or short pay, must be submitted to their lender. This process is highly specialized, and you should use a short sale Realtor when buying or selling.
- Norma Toering, "PVPro"
- Contributions:120
Sellers are in a short sale situation when the amount owed (loan) on the house exceeds the value of the property. In order to sell the property at its current market value the owner will need the lender's approval to accept an offer that is insufficient to pay off the loans. The lender will be short funds to pay off the loan debt. Thus, the name short sale.The lender's approval of the sale can take several weeks, if not months to obtain. The sellers must provide financial statements and a letter of explanation before the bank will consider approving an offer for less than the existing loan amounts.
Short sales are common in a falling market. They are especially prevalant today due to the many properties financed with 100% loans a few years ago.
Short sales are common in a falling market. They are especially prevalant today due to the many properties financed with 100% loans a few years ago.
What is a short sale home?
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