What is a Short Sale?

A real estate short sale refers to a lender(s) accepting a sales price that is less than what is currently owed plus all related sales expenses. This enables a potential buyer to make an offer on a home for thousands less than what is currently owed, and get it accepted by the bank! This is common in a declining housing market, and can be a win-win for both the bank and the homeowner. Home sellers should consider a real estate short sale when the value of their home is LESS than the amount of their outstanding loans. For example, if your home is worth $225,000 but you have a loan of $250,000, then a real estate short sale is a consideration. A bank will begin to look at the Short Sale option only if the homeowner is behind on payments and begins to face foreclosure, but not always. In rare instances, the bank will still accept a real estate short sale if the mortgage payments are current. The process typically works like this:

• The homeowner(s) begin to miss payments

• The lender(s) try to arrange a repayment plan

• The repayment plan fails or is never attempted and the bank mentions a Real Estate Short Sale

If you do not have to sell your home, you could wait for the real estate market to recover; however, if you do have to sell your home, you have three options. First, you can pay the difference between amount owed and market value . Using the example above, you would sell your home for $225,000 and pay the additional $25,000 to the lender, out of your pocket, to satisfy the loan on your property. This does not include other selling costs such as closing costs, real estate commissions, taxes etc. Second, you could let the home go into Foreclosure. The lender will go through the foreclosure process, force you out of your home, and then auction it off to the highest bidder at a Foreclosure or Trustee’s auction. The third, and best option, is to pursue a real estate short sale. To be successful in this type of transaction, you need the best team working for you!

As a broker, and Certified Distressed Property Expert (CDPE), Alfy Sprenger, has helped numerous families achieve this delicate process.

Don’t wait any longer!  Contact us today, and we will be happy to help.

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Alfy Sprenger, Principal Broker
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