SHORT
SALE
General Information:
}} For Owners who can no longer afford
to keep mortgage payments current,
there are alternatives to bankruptcy
or foreclosure proceedings. One of
those options is called a “short sale.”
}} When Lenders agree to a short sale
in real estate, it means the Lender
is accepting less than the total
amount due on the loan- accepting
the proceeds as payment in full on
the mortgage, even though the
sales price is less than the existing
encumbrances.
}} Short sales are the latest trend for
the slowing real estate market, and
housing advocates are advising
struggling Homeowners to
contact their Lender about a sale
before falling into foreclosure. As
foreclosures rise, Lenders are more
motivated to short sale because they
at least get most of what they are
owed.
Be Aware… It Isn’t Easy.
}} Be aware there could be tax
ramifications with a short sale. It
is highly recommended that you
contact a qualified tax professional
or outside counsel concerning the
transaction.
}} There is no guarantee that a Lender
who accepts a short sale will not
legally pursue a Borrower for the
difference between the amount owed
and the amount paid. It would be
wise to obtain legal advice from a
competent real estate lawyer.
}} You should also be aware that it isn’t
easy. In most cases, a short sale will
Continued on the next page.
}} involve more details and paperwork
than a traditional transaction. The sale
itself will require at least the same
amount of time, energy and expense
normally used to sell a home. Plus,
instead of the current Borrower/Seller
providing proof of credit-worthiness,
they will usually need to prove that
they deserve a special consideration by
showing lack of financial stability. After
all, if the Lender thinks there are other
means to pay off the loan, they wouldn’t
willingly accept less.
YOUR CLOSING
PROFESSIONALS
Who Benefits From a Short Sale?
}} Seller:
The Seller does not get any equity from
the sale, but they also do not get a nasty
foreclosure mark on their credit record.
And although Lenders lose out onmoney
they’re owed, a short sale lets them avoid
a costly foreclosure on the home.
}Lenders:
}
Most Lenders prefer short sales because
foreclosures cost them time and anywhere
from $30,000 to $50,000 per house in
legal, appraisal, marketing and servings
fees. A short sale gets a home off their
books and typically costs a Lender less
than a foreclosure.
What is North American Title’s Role?
Since each transaction is unique, short
sales are examined on a case by case basis
and require an underwriter’s signature.
Once the purchase agreement is drawn
up between the parties involved (Seller/
Buyer/Lender), North American Title
steps in to evaluate the transaction and
determines if the deal can be closed.
We are your escrow agent in the closing
process, providing solutions to the
complicated procedure of buying and
}Listing/Buying
}
Agents:
selling real estate. We go beyond the
Although agents may take a hit on the
commission because the Lender may insist
on a fee reduction, the bottom line is the
agents and their brokers still get paid for
selling the property. Buyers: Buyers pursue
short sales to get a good deal. Buying a
property belowmarket value lowers the
Buyer’s basis in the property and the
Buyer’s mortgage payment is reduced
because the loan is less.
expected to seal the deal professionally,
as quickly and efficiently as possible.
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©2013 North American Title Group and
its subsidiaries. All Rights Reserved. North
American Title Group and its subsidiaries are
not responsible for any errors or omissions,
or for the results obtained from the use of this
information. | TX 13-2204EG 06-20-13