A "short sale" is the term for a sale of real property for less than the amount of the loan(s) that presently secure the real property. For example, if a residence has a first lien of $100,000, but similar homes in that neighborhood are only selling for $80,000, then the lender (in this case, also known as the first lienholder) may consider allowing the property to be sold for $80,000. The remaining $20,000 (i.e., the difference between what the house sells for and the amount that is owed on the first lien) may be written off by the lender, or the lender may require that the seller sign a separate promissory note and/or secure the remaining $20,000 with some other real or personal property.
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Short sales are interesting and yet, frustrating at the same time. It is pretty hard to predict if a lender will O.K. a short sale.
-Audrey
Posted by: Wheat Ridge Colorado homes for sale | April 02, 2009 at 01:45 AM