WHAT IS A SHORT SALE?
We hear a lot of verbiage being batted around with regards to real estate these days and I’m not sure that it’s all understood. So, I thought I’d give some definitions to those words since in today’s market it may be of value to you.
While the Truckee/Lake Tahoe region has its’ share of REO’s and short sales, it is not as prevalent as in some other metropolitan areas. Truckee and Lake Tahoe have many 2nd home owners. Generally, we find them in a little better financial situation than some other areas.
A “Short Sale” typically means that the present owner can not make the payments on the home and may be in line to loose the home through a foreclosure. In this situation, the lending institution has agreed to take less, than the mortgage amount to sell the property and get it off of their books, while keeping the present owner in the home and keeping it occupied. The owner must meet a number of criteria in order for the bank to participate in this sale. Number One, the owner must show that he or she has a hardship. Such as loss of job, divorce, sickness causing inability to make house payments and no cash or other assets. Number 2. The owner must have a financial shortfall (expenses ore more than income, and 3. the owner must be insolvent (liabilities exceed assets)
The bank and the owner agree on the mortgage discount that the bank will support and the owner then puts the house on the market. When offers come in, the bank will look at the offers and must agree to participate since some offers may come in lower than the agreed upon minimum price.
Don Schaller
Broker/Owner
Schaller Family Realtors
Dickson Realty, Truckee
