A short sale or short payoff occurs when a lender agrees to accept less than the outstanding loan amount to satisfy the seller’s loan. A short sale allows both the lender and the distressed property owner to avoid foreclosure by selling the property at a loss. Combined with the weak real estate market the following are common situations facing distressed sellers:
Short sales are more complicated and time consuming than an average real estate sale, making it important to retain an experienced real estate attorney to oversee and negotiate the transaction. A distressed seller initiates the short sale by contacting a Realtor to find a buyer at the current market price, sometimes at a significant reduction to what the seller may have paid for the property. The seller’s Realtor must find a bona fide purchaser for the property at the current market value before the short sale offer can be submitted to the seller’s lender. Aronoff & Linnell works with sellers, buyers, and realtors to optimize the short sale package, negotiate with the lender and gets the lender’s approval for the terms of the sale.
Lenders Prefer Short Sales Short sales are more beneficial to a lender than a foreclosure. Lenders prefer short sales because they are not in the business of managing and owning property and short sales are less expensive than completing the foreclosure process. Generally, the net proceeds a lender receives from a short sale transaction will be greater than the proceeds the lender can expect to receive following a foreclosure sale. It also prevents the expense and lost time that accompanies a foreclosure. Aronoff & Linnell are real estate attorneys experienced in negotiating with lenders to obtain a timely short sale payoff that satisfies both the lender and the seller.
We also assist Realtors, title agents and mortgage brokers guide their clients through the short sale process, and coordinate the transaction from contract to closing.