Short Sales…….There’s Really Nothing Short About Them!

With the real estate meltdown occurring in 2005 sellers found just about any way they could to unload distressed homes without incurring judgements, liens and the fear of banks forever controlling their financial future. One solution to all of the above is the “short sale”, which to put into simple terms, is an agreement between a lender and a borrower to allow the borrower the ability to sell a home at less than the principal balance owed. So, for instance, if you bought a home in 2005 for $100,000.00 and it is now worth $50,000.00 in 2012, you would be left with a few choices. One, you could ask for a principal reduction (simply asking the lender to cut your balance owed on your home). From my experiences, this hasn’t worked, and most borrowers who attempted to go down this route ended up getting foreclosed on. Option B is a refinance; however, with negative equity (the value of a home vs. what is owed on it)