A Short Sale

Q: "In regards to opportunities to buy in the current real estate market, I’m not familiar with a short sale. What is it?" - Dorothy Ann, Wellfleet

A short sale, quite simply put, is when a seller sells his or her property for less than the mortgage.

Where it gets tricky, is when there are two mortgages or a home equity line of credit that has a balance.

Typically. The first mortgagee is in the position to make the agreement of short sale. However, in other cases, the second mortgagee needs to also give approval and may take as little as a token payment in order to approve the short sale.

However, the balance leftover after a short sale happens can either be written off by the bank, charged to the seller, or reported to a credit bureau as a default.

As we pioneer our way through this new way to sell property, mortgage brokers, realtors, sellers, buyers and bankers are all learning new ways to make short sales a possibility and make sure no one gets the short end of the stick.