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What Exactly is a Short Sale?

At face value, the term short sale seems obvious — the sale of the house is short/quick.  But in reality, short sales may take months and even years to close.  

A short sale happens when money from the selling property fall SHORT of the debt (e.g., mortgage, liens) owed against the property. 

In today’s market, when short sales happen it’s often because people either purchased their home or refinanced their mortgage when the market was high.  Now that housing prices have decreased, when they go to sell the house they cannot afford to repay the debt, and the lien holders (e.g., bank, mortgage company) agree to accept less than the amount owed.  The amount owed, or unpaid balance is known as a deficiency.  

A short sale agreement does not necessarily release borrowers from repaying the debt and will often result in a negative credit report against the homeowner.

And as a buyer, a short sale may be a great purchase, but does not necessarily mean that you’re always getting a deal.  

 

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About LoveAtFirstSite

Some people love dogs, some people love cars, but not me. I love dirt. I'm pretty sure it's not the first thing you think when you see me, but it's true--I really love dirt. Although, I'm picky about where my dirt comes from. Construction sites are perfect, backyards are OK, but the streets of NYC not so much. So now that you know that I love dirt, you may want to know why. I've been on and off construction sites since I was little. And here's a picture to prove it. I recently quit my public relations job in NYC in the pursuit of cleaner dirt. I love home renovations and remodeling, and I've been working closely with my dad who has been in the business for 40 plus years to learn everything I can. I’m also a full-time residential real estate agent in the Greater Fairfield area. I’m dragging my fiancé, Neil, along for the ride too. For those of you who know us, thanks for reading. And for those of you who don’t, welcome to our house flipping, home remodeling, suburbanite lives! Alana Brier | Newtown, CT | 203.304.4235 |

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