Short Sale Definition?

[Persevere]

What is the official definition of a short sale? My understanding is that, when a house sells for less than is owed on it, and the bank accepts less money, then it is called a short sale. Our bank tells us that they may be able to offer us a personal loan for the balance owed, but they still want to call it a short sale. Does this make sense to anyone? We want to pay our full debt, but the house isn't selling at the price we need to get, so we're looking for other options.

[4jacks]

That still counts as a "Short Sale" from what I've heard. Sounds like the bank is willing to work with you, which is a good thing.

It's good that you do want to pay back the debt. If you are going to sell the house now, the only way is to take a personal loan like the bank is offering.

If you can afford to stay in the house, you can try to ride out the market. No one knows how long that will be.

Good luck, and welcome to the boards.

[KrozFan]

I think it's a short sale because you're not selling it for what it's worth so they're clearing the title for you to give to the new buyers, even though you still owe the bank money. I'm not 100% on that, but I think that's what you're running into.

[Clarinda Della]

I haven't been thru the process but I'm studying to become a real estate investor and that's one of the processes I've been learning about. If you don't already know it, that means that the bank has these properties for which they've given loans to people who wanted to buy and now those people aren't able to keep up the payments, so the bank reclaims the ownership. After awhile, if they can't find new buyers they need to unload these properties, so they sell the existing mortgage at a discount. It can be a good deal for someone like yourself since you won't pay top dollar. Feel free to ask any other questions if I can help

[pochax]

If you don't already know it, that means that the bank has these properties for which they've given loans to people who wanted to buy and now those people aren't able to keep up the payments, so the bank reclaims the ownership.

Actually this is called a foreclosure. A short sale occurs when the owner (who has a mortgage on the house) sells the property for less than what the mortgage balance owed is. some banks will forgive the difference whilst others will not and come after you for it. That is why it is recommended before doing a short sale, to get your mortgage holder to agree to it and presumably NOT come after you for the difference so you won't have to owe any more money. This will still hurt your credit score significant (similar to a foreclosure) but not quite as bad.

After awhile, if they can't find new buyers they need to unload these properties, so they sell the existing mortgage at a discount. It can be a good deal for someone like yourself since you won't pay top dollar

Actually since the bank now owns the house, they don't have to sell the "mortgage", they sell the house. yes, it is possible to get a good deal on a house after foreclosure, but my sense is that you have to get to know the business pretty well and do your research....i have heard of people buying foreclosed homes and closing the deal and then when they get the key to go to the house, the person evicted is still living there! talk about awkward....(yes, these are the freakishly extreme stories, but they make for good media hype).

Feel free to ask any other questions if I can help

[Clayton]

I am in the process of buying a short sale property. You have to be careful and spend plenty of time doing due diligence yourself, but I think in my case it's going to be a worthwhile investment. You don't want to not know exactly what your getting into like the comment above stated. be smart, skeptical, and aggressive and you'll do well.

[cev2000]

I am in the process of buying a short sale property. You have to be careful and spend plenty of time doing due diligence yourself, but I think in my case it's going to be a worthwhile investment. You don't want to not know exactly what your getting into like the comment above stated. be smart, skeptical, and aggressive and you'll do well.

What kinds of things do you need to look out for? Thanks!

[Maurice111]

I agree with the definition of the short sales as i have read in my course books but theses definitions are keep on changing with changing mode of businesses world wide.So, i consult a lot more on the forums of this kind.

[Daniel]

Hi,
It's a short sale because you're not selling it for what it's worth so they're clearing the title for you to give to the new buyers even though you still owe the bank money.I think that's what you're running into.

[Denilson]

Well it is a right definition of short sales and i agree with this and bank accepts less money and house is sold for less than it is owed.
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[elenalee]

Thanks for providing the information about short sale defination
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[Channing]

Thanks to all of your great provided answers about the short sale and also what i know about a short sale, means that you sell the property. But you get a lower price than what you owe. Then you go to your lender, or both lenders if you have two loans. You get them to approve the sale of your house.
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[Franklin]

I think it's a short sale because you're not selling it for what it's worth so they're clearing the title for you to give to the new buyers, even though you still owe the bank money. I'm not 100% on that, but I think that's what you're running into.

Yeah I think that it is right to some extent because I also think that you are right and I am also not 100% sure about it.

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[sanalforum]

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