The bank has the right to make the seller pay off less than it is and with the right to come after the difference in a latter time.
A short sale is when the seller is still the owner of the property but the payoff is less than the market value of the home and the seller does not have the funds to pay the bank the additional amount. Sometimes the bank will take less than what is owed on the house to try to prevent it from going into foreclosure. It is a very lenghtly and time consuming process. You have to have all the required documents from the bank before you can submit them an offer. The Seller has to agree upon the price first and then it has to go to the mortgage company for approval. In some cases it could take up to 6 months for the property to actually close. You must have a patient buyer. Hope this helps.
This blog post might help answer some of your questions:
This post includes some video of a California attorney that speaks about Short Sales.
If I can help with the South Carolina market, please feel free to call or email me.
Have A Great Weekend!
David A. Patterson, Associate Broker
Keller Williams Realty
4400 Saint Andrews Road
Columbia, SC 29210
Listen ONLINE to The David Patterson Show
Sundays -- 1:04 PM EDT -- http://budurl.com/dpshowonline
â€œA vision is a clearly-articulated results-oriented picture of a future you intend to create. It is a dream with direction.â€ --Jesse Stoner Zemel