WHAT IS A "SHORT SALE?"

QUESTION: Mike, what is a short sale?

CRIBBIN REALTY'S ANSWER - Millions of homeowners are behind on their mortgage and can no longer make their mortgage payment due to either job losses, divorce, bad loans they should have never been placed in, an ARM that's resetting higher, etc. Up to recently the only generally accepted potion was forclosure. That is usually not the ideal solution even if it does erase the mortgage lien since, 1) it does not preclude the bank from seeking a deficiency judgment against the borrowers (personal judgment that is collectible after the conclusion of the foreclosure) and 2) a foreclosure devastates the homeowners credit. A forclosure Judgment is on one's credit report for 10 years.

Solution: Short Sale. get the lender to accept an amount below the mortgage payoff and waive the deficiency against the homeowner. In most cases, all closing costs are built into the deal where the lender pays the closing costs. On occasion the Seller will need to bring cash to the closing table. Everything is case by case basis.

As Always if you have a real estate question or a topic you would for me to discuss please email me at mike@cribbinrealty.com.