Short Sale 101
This article will attempt to address the following: 1. Define a short sale 2. Talk about the different ways it can come about and be structured 3. Talk about how it?s different that foreclosure or bankruptcy 4. Talk about the implications for the seller 5. Talk about the implications for the buyer 6. Address investor related questions on capitalizing on short sales (which you will soon find based on the definition is not really what you investors are looking for) 7. If your question is not answered in the article, see the Short Sale FAQ. Definition: A short sale is an ?arrangement? between the current owner of a home and the bank that lent them the money to buy their home to accept an offer for less than the total amount owed to pay off the home. The ?deficiency? is the difference between the amount owed and what the bank collec how to sell your house quickly ts at the short sale. Although, the ?arrangement? can take many different forms, there is no other definition of a short sale. I say this because many realtors and some investors simply throw the term around as if it meant ?a sale under market value.? No. A bank owned (foreclosed) house is not a short sale. A seller deciding to lower their price and take less profit is not a short sale. An old lady that owns her home free and clear, selling a $150k home for $75k, IS NOT A SHORT SALE. For it to be a Short Sale, someone must be getting ?shorted.? Either the seller, or the bank. I will explain how both of those happen in more detail presently. Free Foreclosure List Another important definition of a short sale is how it differs from foreclosure. In foreclosure, the homeowner falls way behind on their payments and the bank repossesses the house and sells it.