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Manuel Aragon…, Other/Just Looking in Southbelt/ Ellington,...

what does short sale mean?

Asked by Manuel Aragon Jr., Southbelt/ Ellington, Houston, TX Sun Dec 23, 2012

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11
Manuel,
Basically the seller is working to sell the property for less than the amount they owe the bank or banks to avoid foreclosure. They are "short" the payoff amount and need to convince their lender to take a loss. Banks do not like to lose money, the approval process can take time (a couple of months or more) and the bank does not always approve them. The advantage of a short sale to the seller is that they can walk away with less of a hit to their credit. Short sales can be a good opportunity for a buyer but they can be challenging and each situation will be different. A short sale is not automatically a great deal from a buyer’s view point.
5 votes Thank Flag Link Sun Dec 23, 2012
It's when you owe the lender more than the market price of your home and you don't wish to pay the difference. You would then ask the lender to accept a repayment based on the best price you can get that is short of the loan total.
Web Reference: http://www.archershomes.com
2 votes Thank Flag Link Sun Dec 23, 2012
When a homeowner owes the mortgage company more than his home is worth, and he wants to sell the home, he asks the bank for permission to sell the home 'short. He basically asks the bank to take less than what is owed to them and, hopefully, to forgive the difference. We call that a 'short sale'. Banks do not want to do short sales if they can avoid it, so they will ask the home owner to prove they have a 'hardship', a reduction in income or a move due to employment, some event that makes it impossible for them to continue paying the current mortgage. Once that is established, the bank still has to approve the price and terms of the sale. It takes longer than a traditional sale, but it is well worth it for both distressed homeowners and for buyers who can often find a good deal in exchange for their patience in dealing with the bank.
1 vote Thank Flag Link Sun Dec 23, 2012
i JUST STARTED FALLING BEHIND ON ALL MY BILLS, I WAS IN A REALY BAD ACCIDENT OCTOBER 19TH 2014, I WAS RECEIVING A LITTLE OVER 2000.00 MY DAUGHTER WAS RECEIVING A LITTLE OVER A THOUSAND, NOW THAT MY DAUGHTER IS 18, HER MONIES WILL STOP SOON. PLEASE CONTACT ME AT YOUR EARLIEST CONVENIENCE AT 267-767-7722. THANK YOU THOMAS DALLMER
Flag Fri Aug 5, 2016
what is the benefit for the buyer or is there any benefit
0 votes Thank Flag Link Sun Mar 15, 2015
A nightmare. LOL. Kidding ... sorta. All the other agents have given you the correct information. Before applying for a short sale, call a reputable agent and try to sell the home to get out from under it. If you owe more than what the market dictates the current market value to be, and you can't rent the home or you've experienced a hardship via loss of employment, job transfer, divorce or death, an experienced agent can help you through the process of applying for a short sale. Be prepared to divulge financials, ie; taxes, payroll stubs, debts and supply a hardship letter before your lender will even consider allowing a short sale. It's time consuming and frustrating, but in the end, it will save you from having a foreclosure on your credit history.
0 votes Thank Flag Link Thu May 29, 2014
Briefly, a short sale occurs when a homeowner sells their property for less than what is owed on their mortgage.

A short sale is not the same thing as a foreclosure. In fact, the two processes operate separate and apart from each other. If a seller is facing foreclosure, it is almost always in their best interest to attempt a short sale with the bank.

While working to complete your short sale with your Realtor, your attorney, and the bank, the foreclosure process will continue on its own, but generally speaking, a short sale takes much less time than a foreclosure. A short sale will typically have less of an impact on your credit score than a foreclosure, as well. A foreclosure is considered a judgment against you and will stay on your credit report for 10 years. A short sale is considered “settling a debt for less than is owed” and, as with most other negative trade lines, will come off of your credit report in seven years.
Web Reference: http://www.chicagorelaw.com
0 votes Thank Flag Link Sat May 25, 2013
Good question..the previous agents have responded greatly and very precise on their definitions, they are right and my opinion after I've done about four and two did go title closing table...means it will be short in money but not short in time...
0 votes Thank Flag Link Sun Dec 23, 2012
@Al Geffen

Both short sales and foreclosures result in forgiveness of debt. Both can cause the homeowner who has lost their home to be subjected to a large tax obligation since forgiven debt is traditionally considered to be taxable income. In the cases of short sales and foreclosures – and loan modifications – that meet specific criteria defined in a law passed by Congress, the tax obligation is waived. The law expires 12-21-12. It is likely to be extended in some form but perhaps not as soon as the end of the month. Expiration of this law could subject those who close short sales or have their houses foreclosed after 12-31-12 to very substantial tax obligations.

Check with your tax expert for details.
0 votes Thank Flag Link Sun Dec 23, 2012
As of 1/1/13, foreclosure may be a more viable option, since short-sellers will be taxed on the difference between sale price and balance owed as ordinary income. If they can't make their monthly payments, how are they going to pay tax on an additional income ... likely tens of thousands. I'm not a fan of short sales anyway, since they tend do drag on interminably, and are as likely as not to fall out (the national average of those that reach closing is about one in four). My last (and final) one went eight months and fell apart ... my time can be spent more productively.
Web Reference: http://www.har.com/algeffon
0 votes Thank Flag Link Sun Dec 23, 2012
HI MANUEL .
SHORT SALE IT IS AN STAGE TO AVOID FORECLOSURE.I CAN GIVE YOU MORE DETAIL IF YOU REPLY TO ME , THANK YOU
0 votes Thank Flag Link Sun Dec 23, 2012
You, the seller, ask the bank to allow the sale of the home for an amount that will not pay off the loan. Normally you sell a home and pay off the loan with the proceeds, the overage is the profit. In a short sale the bank must agree to lose money and allow the sale. They don't like that and sometimes they do, sometimes they won't and sometimes they say they will but they want more than you have offered as the buyer. They are slow, always frustrating and never certain.

They are the wild wild west of real estate these days - Yeee Haaa
0 votes Thank Flag Link Sun Dec 23, 2012
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