Thursday, March 28, 2013

What On Earth Are Short Sales?

Wow, Tae Kwon Do last night was a real kicker (no pun intended)! We have a 1 1/2 hour class on Wednesday evenings, and last night we worked the bo staff for a good half hour or more. This is only my third time working with it, and by the time we got home last night I had 2 blisters on my left hand, and a very sore heel, complete with another blister. This is due to spinning the bo in the figure 8 pattern, and also spinning on my right heel during a fighting technique we practiced. However, blisters and soreness aside, I am loving Tae Kwon Do and all I have learned so far!

Are you familiar with short sales? Have you ever used a short sale, or know someone who has? Have you ever even heard the term before? I admit, until recently I was completely unsure of what exactly a short sale was! I had heard terms such as "short sale las vegas", but really had no clue about the nature of a short sale. 

Basically, a short sale is just the selling of real estate, such as your home, but the proceeds are not enough to cover the full balance of debts owed. The money received from the sale falls "short" of the money owed, which is, I assume, where the term short sale came from. Anyways, in the case of a short sale, the lien-holder agrees to release the lien they hold on the piece of real estate, and accept a lower amount than what is owed on the owner's debt. 
The unpaid balance is known as a deficiency, and a short sale does not necessarily mean the borrower is released from his obligation to pay the rest of what he owes. This is something that would be discussed and settled between the individuals involved; there is not really a set standard for this detail of short sales.

Apparently a short sale is an alternative to foreclosure, and is often chosen because it lessens extra fees to both the borrower and creditor. However, it does still usually result in a negative credit report on the owner/borrower.

This is a sponsored post however, all the points and views are my own.

1 comment:

  1. We unfortunately had to do a short sale on a duplex we owned a few years ago. We bought it when the market was high and the value went way down and we couldn't sell it. After several bad renters who refused to pay for many months and then left without even telling us they were leaving, we couldn't keep up with the mortgage. We were so happy to finally be able to get rid of it.