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Here is a yard sign that you don’t see every day…well…until recently anyway.
“BANK SHORT SALE”
A bank short sale, also known as a mortgage short sale, is when you sell your home “short”, or for less than what you owe on it (less than the market will bear). Your mortgage holder has to approve the offer before you accept it.
Now why would anyone want to do this?
It’s not so much of a “want” as it is a “need”.
You arrange for a mortgage short sale in order to avoid foreclosure in almost all cases.
For example, you owe $100,000 on your house but your local housing market dictates that your house is not worth quite that much, and you just lost your job. In other words, you’re upside-down on your mortgage but desperate to sell it.
You know that you are unable to keep up your payments so you contact your mortgage company and arrange a “mortgage short sale” to save your financial butt. You then get an offer for $95,000. If the bank approves it, it’s a short sale.
Why the Mortgage Lender Would Agree to Such a Deal
The bank eats the loss but they avoid yet another foreclosure on their books. This is a win-win-win for all parties involved…to varying degrees. Everyone is making the best of a difficult financial situation. This is something that is going on all over the country as I write this. Just look around and you’ll see it going on in your town, too.
It’s a buyer’s market. That’s certain.
I’m avoiding discussing all of the details of mortgage short sales on purpose. The articles that follow should answer any question you may have about your particular real estate situation.
Do I look like an attorney? (don’t answer that)
The “finer” points of how a mortgage short sale works: A MUST read.
- Nolo definition of mortgage short sale
- Lawyers.com discusses the tax issues, and more, regarding mortgage short sales
- Mortgage News Daily discusses the minutia of mortgage short sales. You will want to read this, if nothing else, as it relates to bank short sales.
- Mortgage Short Sale FAQ
I started as a home-stalker… visiting brand new homes under construction in the neighborhoods near my house. That inspired me to write about home building and home renovation projects — chronicling homes during different phases of construction from a consumer's point-of-view. Basically, the tips you'll find in my articles are a collection of checklists for what I think should (and should not) go into building or remodeling a quality home.