October 2008 e-Newsletter
Understanding Short Sales in New Albany
You may have heard the term “Short Sale” being used lately with regards to a real estate transaction. Many are unfamiliar with what it is. The Columbus Board of Realtors recently released information to help understand what they are and how they work. Even though the New Albany real estate market is not as difficult as some areas, the hardships and heartache of short sales has definitely become a reality for enough people that it’s worth understanding. Tony and I work with several local experts who have successfully closed many short sale transactions. If you are contemplating such a sale, don’t hesitate to contact us for assistance.
A “Short Sale” is used in the real estate business to describe a situation where there is more debt owing against a property than the current market value of the property, and where the Seller is unwilling or unable to bring sufficient assets to the closing to cure all deficiencies. In other words, the Seller can’t sell the property unless the third parties, or Creditor(s), agree to accept a payment that is less or “short” of the amounts actually owed to the Creditor(s). The Creditor(s) are usually mortgage lenders, mortgage insurers, or taxing authorities.
A Short Sale requires the written approval of the Creditor(s). Consequently, the Seller of the property and any Buyer, are advised that even if they reach an agreement between themselves for the purchase and sale of the property, that agreement will not be binding until the Creditor(s) approve the terms of the Short Sale. The Seller and Buyer should be prepared for significant delays in receiving any response from the Creditor(s). As always, a Buyer and Seller are advised to seek advice from an attorney, accountant, or other expert regarding the potential consequences of a short sale.