Broker Short Sale 101
Real estate short sales occur when owners experiencing financial hardship obtain lender approval to sell their homes for less than the amount they owe on their remaining mortgage balances. Lenders approve short sales to avoid costs associated with foreclosure.
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Significance
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Since short sales are different than foreclosures, the owner of the short sale property is typically still the legal property owner, and although the lender is required to approve the sale, the owner is the first to approve or reject the seller's offer.
Features
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Short sale price offers are usually for amounts less than the seller's mortgage amount and less than what the seller owes the lender.
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Considerations
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Brokers who employ selling agents (the buyer's real estate agent) have both fiduciary and legal obligations to disclose all offers to the seller.
Types
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Brokers who employ listing agents (the seller's real estate agent) may have an obligation to help the seller arrange the short sale activities through his lender and loss-mitigation representatives. Listing brokers may have to ask the seller to sign a release or authorization form to allow their agents to speak directly with the lender about the seller's loan.
Expert Insight
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Brokers for both listing agents and selling agents should run independent "comps" or comparative report pricing the house in regard to similarly situated houses in the neighborhood. This allows brokers to obtain the best sales price or purchase price.
Disclaimer
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Since this is general information for educational purposes, and laws may change frequently, the information should not be used as a substitute for competent legal advice from a licensed attorney in your state.
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