Historic Homes Blog

Everyone seems to be throwing terms around, and you may be wondering what they actually mean.  One of those terms is short sale.  What is a short sale? And what does it mean to you?

In the simpliest terms, a short sale is the sale of a property for less than the amount of the total encumbrance.  This is a combination of all loans -  the first mortgage, the second mortage, line of credit and any other encumberances, i.e., equity lines, judgements, etc.

 If you need to sell your property and the market value does not yield proceeds to pay off all lenders and encumberances  in full, you have a short sale situation.  In order for a lender to consider allowing a short sale and receiving proceeds which are less than the amount they are owed, you will have to have an acceptable hardship and must comply with their request for information to validate that hardship.

About 20% of the sales in Orange County at this time are resulting in short sales, so it is a common delima.  The appropriate professionals who are adept at working through these often tedious transactions can help you resolve the situation.  You are always advised to get legal and tax advise to be sure that this is the best path for you. There are tax and credit consequences of which you must be aware. 

Paul Caiten has an insightful look into the short sale www.hangtenrealestate.com and Laurie Manny in Long Beach has some incredible short sale properties www.lauriemanny.com