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Short Sales Need a Willing Lienholder Published February 6, 2010 A Short Sale is the sale of real estate in which the proceeds of sale do not satisfy remaining balances of the underlying mortgages. It is a perilous real estate transaction in which to get involved, especially if junior lienholders and others are due money upon sale.Rules of a Short Sale: 1. Get a title report. Know who is owed money. 2. Get Bank/Mortgage company approval for doing a Short Sale. Some lenders may have already sold the loan to a group of investors who have no interest in taking less than what is owed and no interest in foreclosure because of the liability foreclosure puts on investors/lienholders that now find themselves as new owners. 3. Make sure the contract to purchase says it is subject to a Short Sale. This is not a Foreclosure. Those are forced sales due to non-payment. Seller and lienholders are consenting in a Short Sale. The consent can change before closing, leaving a Buyer out on a limb after spending money for inspections & appraisal fees and much time that could have been spent buying another easier-to-acquire property. Be leery of any property being sold as a “Short Sale.” If it is, have the above Rules 1 and 2 been completed? If not, walk away and buy a property with a Seller ready to pay his bills when the property sells. Next week: A local Title Company saves the transaction! David Bowers is President of the Galveston Association of Realtors® and is associated with House Company Realtors. Contact David at (409) 771-4637 or at david(at)davidbowers.com. - Written By David Bowers |
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