Mariana Wagner

Colorado Springs Real Estate Definitions : Short Sale

The Colorado Springs Real Estate Connection would like to introduce another great article from our friends at Bring the Blog. This article explains exactly what a short sale is.

A “Short Sale” is when a home seller sells his home for a leser amount than what is owed on his mortgage, and the mortgage lender agrees to accept the lesser amount in lieu of a full payoff.

By way of example, a Short Sale may be appropriate for a home seller whose mortgage balance is $250,000 but whose home wouldn’t sell for more than $220,000.  Rather than pay the $30,000 difference to the lender at the time of sale, the seller enters into an agreement with the lender by which all sale proceeds are paid to the bank and the deficient balance is forgiven.

Read Also: Why a Colorado Springs Short Sale is a Great Alternative to Foreclosure

Short Sales are a preferable alternative to foreclosure but the process still harms both parties. For one, the seller is penalized with a derogatory tradeline on credit for not fulfilling a mortgage obligation. And, two, the lender is forced to take a loss on a mortgage loan.  Versus an executed foreclosure, however, Short Sale damages are relatively limited on both sides.

Read Also:  Colorado Springs Foreclosure and Short Sale Information

For this reason, Short Sales are sometimes considered “the economical alternative” to default.

The process of getting a Short Sale approved varies from lender-to-lender and can be time-intensive. Home sellers should not go at it alone — speaking with a real estate agent about the proper protocol is usually the best place to start.  And sellers should be aware of how a Short Sale on their credit can impact future borrowing.

Current Fannie Mae guidelines prevent short-selling homeowners from obtaining new mortgage financing for a period of 2 years.

For more information on buying a Colorado Springs short sale, or if you are facing foreclosure and want to know if you qualify for a short sale, please contact the Wagner iTeam: 719.434.7525

We are  Certified Distressed Property Experts and know what it takes to buy or sell a short sale in Colorado Springs.

February 3rd, 2010 by Mariana Wagner | Leave A Comment

This entry was posted on Wednesday, February 3rd, 2010 at 6:46 am and is filed under Colorado Springs Homes, Colorado Springs Real Estate, Foreclosure Information, Real Estate Glossary. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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