What is A Short Sale?

A short sale is the sale of a property, with the authorization of the creditors, for less than what is owed on it. Short sales are done all the time.  Whether it is for the forgiveness of debt owed by a nation or an individual; it simply means that someone is willing to settle for less than what they originally anticipated. It’s part of business. All lenders know they will not win all the time. Risk and loss of capital is an anticipated cost in the lending industury. Changing economic conditions, conflicts, and Mother Nature are among some of the many causes of unforeseen situation that turn good lending contracts into bad. In the context of foreclosure on second assets, a short sale occurs when debtors agree to settle their liens for a known amount of money as opposed to taking a chance at auction. Auction prices are often unpredictable and usually greatly discounted. Many lenders are willing to mitigate further risk of loss by making deals before auction. Bad debt is sold by lenders all the time. For instance, there is a huge market for unsecured credit card debt that is sold for pennies on the dollar to collection agencies. That’s self-effectuated short sales. Lenders are more happy to discuss resolutions of aged debt. Their business is to lend capital, not dispose of foreclosed assets.

If you ever run into a problem with short sales, contact me and we’ll discuss more.

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About Patrick Parker Realty

Patrick Parker Realty, an independent boutique brokerage located in the heart of Bradley Beach is your local market leader. We understand the demands of a changing real estate market and avail ourselves of the latest industry information and tools to ensure excellent results. Our Commitment to You Our seasoned Real Estate Agents are committed to providing all of our clients, from first time sellers to veteran real estate investors, quality and friendly service. We walk you through every step of the sale process offering the guidance, feedback, and expertise needed to ensure your complete satisfaction.
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One Response to What is A Short Sale?

  1. Dennis Murphy says:

    I live in sayreville NJ and paid $240,000.00 for my townhouse which is now worth less, I only make $10.00 an hour fixing electronics and need to sell. Should i consider a short sale?. I feel like crying what should i do?

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