I will be developing this page over the coming weeks.
For now I will simply say that any seller who is pursuing a short sale should consult with legal counsel. Any real estate agent taking a short sale listing should insist that his client consult with legal counsel.
The main issues deal with whether the seller will be liable for further monies pursuant to the short sale agreement.
The lender will look at the seller’s financial situation. If the seller has money on hand or other liquid assets, the lender will want the seller to pay to close. Depending on how much money the seller has, the sale might not be “short.” The seller might have a regular sale where he pays money at closing. If the seller has a sizeable retirement account, the lender might demand a promissory note. If the seller owns other real estate, the lender might demand a second mortgage on the other real estate.
The short sale is not the solution to every situation.
Click here to view a typical short sale contract. The lender is Bank of America. It is a form agreement that was poorly adapted to the seller’s unique situation.
There are complications in buying a bank owned REO property or a short sale property.