Definition of a Quick-Sale Home

A quick sale transaction can avoid foreclosure.

The condition of the economy and lack of jobs has played part in the increase of quick sales in the country. The National Association of Realtors reports that real estate sales in July 2010 dropped by 25.5 percent in comparison to July of 2009. Sales are the lowest since May of 1995.

Quick Sale

A quick sale or short sale is when the property owner is able to sell the property for less than the mortgage with no further obligation, avoiding foreclosure. The lender accepts the payoff and the borrower receives the debt relief.

PMI

The PMI is private mortgage insurance that protects lenders from the expenses and loss of foreclosures. Borrowers that finance more than 20 percent of the cost of the property pay PMI. Some lenders refuse quick sales because they can recoup enough funds through the mortgage insurance, avoiding a loss.

Considerations

Homeowners and buyers that are in the position to make a quick sale on a property should seek legal counsel. Expect the process to be long, negotiate with the lender if possible, and, if using a Realtor, enlist one that has experience in such transactions.

References

• National Association of Realtors: July Existing-Home Sales Fall as Expected but Prices Rise
• Real Estate ABC: Short Sale: Buyer and Broker Beware