Dear Jan: We keep hearing about Short Sales? What is a Short Sale? DC
Dear DC: In order for a Short Sale to occur, a lender has to accept less than the full amount due on the mortgage loan when the property is sold. The lender would prefer to do this instead of foreclosing on a property because it is quite expensive to foreclose, thus they lose even more money.
More and more Short Sales are happening due to borrowers not being able to make their payments. In a class I just took on Short Sales, the message was loud and clear: if you are a borrower who is behind in your payments, you should be putting your home on the market as soon as possible. You and your agent should be able to communicate with the Short Sales department and come up with a plan acceptable to the lender.
There can be legal, financial and tax consequences associated with a Short Sale so you should seek professional help in these areas. Borrowers, who are behind on their payments, often having trouble making that first call, but they should pick up the phone today and call an agent. Thanks for your question!
If you have a real estate question you would like answered, e-mail Jan Zufelt at firstname.lastname@example.org; put KCN in the subject line.