Welcome to LV Short Sale Pros, this website has been posted as a foundation for understanding the short sale process and the team available to assist throughout. Please take a moment to read the content and then contact us for additional information and/ or questions. We are here to help and have heard every question in the book, do not hesitate to email or call.
What is a short sale?
Definition by Wikipedia:
“In real estate, 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 bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the mortgagor. This negotiation is all done through communication with a bank's loss mitigation or workout department. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale. Many Short Sales leave a deficiency balance for which the Mortgagor / Borrower is still liable. In 99% of all cases it is not a settlement-in-full. A deficiency balance will remain as a potential liability for the Mortgagor / Borrower. The bank's opportunity of pursuit of a deficiency judgment will vary from state to state
Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market and the borrower's financial situation.
A short sale typically is executed to prevent a home foreclosure, but the decision to proceed with a short sale is predicated on 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 carrying costs that are associated with a foreclosure. A bank will typically determine the amount of equity (or lack of), by determining the probable selling price from a Broker Price Opinion BPO or through a valuation of an appraisal. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. A short sale is typically faster and less expensive than a foreclosure. In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.”
Reading in between the lines:
As you can tell by reading the above definition of the short sale, there are many factors that are taken into account when even considering a short sale, and then even more intricacies during the actual process.
Our team will take the necessary time to discuss and brainstorm the positive and negative outcomes of the short sale and your specific situation. In addition, we have a team of realtors, escrow agents, attorneys and accountants that are experts in the short sale process. Together, an educated decision can be made as to what is the correct decision for you and your family.