LAW OF THE LAND: ‘Short’ sales — a good deal for everyone
Declining real estate values have resulted in a number of people owning property that is “underwater.” In other words, worth less than the amount of the mortgage. In order to get out from under the mortgage, these homeowners may want the lender to approve a “short sale.”
A “short sale” occurs when a lender agrees to accept less than the outstanding loan amount to satisfy the seller’s loan. A short sale allows both the lender and the distressed property owner to avoid foreclosure by selling the property at a loss.
If your lender agrees to a short sale, you then hire a real estate agent to find a buyer for the house, you sell the house for a loss, and the bank accepts the loss, thereby avoiding the expense and delay of foreclosure. Some lenders are even willing to contribute funds in order to pay closing costs and other expenses.
Short sales are more complicated and time consuming than an average real estate sale, making it important to retain an experienced real estate attorney to oversee and negotiate the transaction. It is equally important to retain a real estate professional experienced with short sales.
Bill Martin formerly served as a senior attorney in the FDIC’s Professional Liability and Financial Crimes Section. He is currently associated with Crew & Crew, P.A. where he practices corporate, banking, real estate, construction, government, and commercial law. Prior to becoming a lawyer, Bill was an Air Force officer and a B-52 and B-1B pilot.