What is a Short Sale?  Here’s the overview and definition:

A short sale is a potential solution for homeowners who needs to sell (pushed by not making mortgage payments), or, may owe more on their homes than what the home is worth. Bank or lender will accept a short sale or work a short sale, but may prove a difficult process…. because, well, dealing with banks is not easy.  Is a “short” and investment opportunity for an investor, first time home owner, or a family home upgrade?

Buyer/s and their realtor must understand the short process.  The Seller’s “file” resides on a specially assigned pre-foreclosure desk, not the ‘foreclosure’ division of an institution.  Today, banks and lenders have become much more negotiable when it comes to these transactions, with a clear understanding of the local market conditions.  Bank and lenders will not “give” the property away, time is on their side, and if the short does not work out, the Bank ends up with the property in foreclosure.  In foreclosure, as a REO (Bank Owned) property, the Bank will then market the property, much more easily without the owners occupying the property.

But to be technical, here’s a more official definition:

A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value.

or
A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short’ of the total value of the mortgage.

For homeowners to qualify for a short sale, they must fall into all of the following circumstances:
Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that the property owsner cannot afford, or soon will not be able to afford the mortgage.
Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals.
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Cliff Daniels
Realtor
720 434 1418
cliff@actprop.com
Active Properties
Boulder  Colorado