In today’s Real Estate Market, we see and hear a lot of the term “Short Sale”. What is a Short sale? It occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. For example, if you are a homeowner in today’s market and you owe $200,000 on the loan, and the home sells for $190,000 the bank may take that as a full payment on the lien. In most cases, the bank will decide if a sale is the best way for them to recover most of their loss. The bank will usually proceed with the process when they see that they will be hit with a smaller financial loss, than a foreclosure.
Anytime a seller is in a situation where they have to decide to sale their home that way, it is never an easy decision. The seller should always know that when going through with a sale, they are pulling themselves out of a bad situation, with less credit damage than if they were to go through with a foreclosure. Any seller in this situation needs to be aware that when the home does sell through a this process, they will not receive any cash for the sale, the sale will simply satisfy any debt that is owed on the home, giving the seller a fresh start with their next move.
In a this sale, the seller must always remember that they are the winner in the end, due to the fact that the sale will save their credit more than if they were to let the home go into foreclosure. In most cases, a short sale also saves the bank and or lenders a lot of fees that are associated with the foreclosure. It does not clear the reaming debt on the loan, unless the settlement is indicated at the acceptance of the offer.
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