SHORT SALE's

Specialist in Short Sale Representation and Pre-Foreclosure's . Call Edward "Ted" Chalfant for any real estate question's at no cost to you .

Understanding Short Sales

The Definition of a short sale real estate ; is the sale of real estate in which all proceeds are less than the balance owed on the loan secured by the property sold. In a short sale, the lender agrees to accept a discounted balance due to financial hardship on the part of the borrower. The negotiation process is completed through discussion with the bank's asset management department. The home owner sells the property for less than the balance of the loan, all proceeds of the sale are given to the lender, sometimes (but not always) in full satisfaction of the dept on the Property. In such instances, the lender would have the right to accept 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 retain their profit. No regulatory agency governs this hybrid transaction.

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.

A short sale typically is to prevent a home forecloser. Quite often the bank will aprove a short sale if they think that it would result in a smaller financial loss than proceeding with the foreclosure process. The advantage for the home owner includes avoiding having a foreclosure on their credit history and minimal control of the monetary deficiency. A short sale is faster and less expensive than a foreclosure.

In short, a short sale is nothing more than negotiating with lien holders a accepted payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full amount owed. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.

For some home owners this is the only option they have as a result of financialor economic situations as a result of years past adjustable rates, subprime borrowing or predatory lending practices. For some it's a result of medical bill's that have left the family finacially unable to pay their mortgage.

Every short sale requires the home owner to write a descripion and explantion of the hardship they are going through which is preventing repayment of the dept on the property.

Due to the amount of paper work and specific bank requirements for proceeding with a short sale it is suggested that a home owners to have a Realtor that is experienced in the short sale process represent them.