ORLANDO REAL ESTATE SHORT SALE ATTORNEY
Real Estate Short Sales
A short sale is a sale of real estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property sold.
In a short sale, the lender is accepting a balance lower than the actual loan amount. Therefore, the short sale will only go through if the lender accepts the terms of the short sale (which is at a loss to them) and there is a buyer that is ready to complete the sale. The lender’s acceptance of the short sale usually depends on the financial situation of the debtor (the debtor must have a provable hardship), the current value of the home, and the current real estate market. This negotiation is done through a bank's loss mitigation or workout department.
A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale depends upon whether it is the most economic way for the bank to recover the amount owed on the property. Often a bank will allow a short sale if they believe that it will result in a smaller financial loss than foreclosing as there are large costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack thereof), by determining the probable selling price from comps in the area and/or by appraisal. The advantage to the homeowner, include avoidance of a foreclosure and some control as to what is owed and remaining deficiency on the loan. A short sale is typically faster and less expensive than a foreclosure. Basically, a short sale is nothing more than negotiating with a lien holder a payoff of the loan for less than what is owed, which is short of the full debt amount. It does not extinguish the remaining balance or what is known as the deficiency, unless settlement is clearly indicated on the acceptance of offer.
Consultation or general questions:
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