Tuesday, July 20, 2010

Understanding Short Sales

A short sale in real estate occurs when the outstanding obligations (loans) against the property are greater then what the proeprty can be sold for. The borrower (normally the seller) proposes that the secured lender accepts a compromised (reduced) payoff amount upon the sale of the property.

Generally speaking, a seller must be in arrears with their loan, however a lender may consider a short sale based on the financial hardship of the seller. Always confirm the requirements with the lender.

A short sale has tax, financial and legal implications which may be best understood by consulting with an attorney specializing in this area. If you find yourself facing this dilemma, please call us today to discuss your options.

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