In real estate, a short sale is when a homeowner sells their property for less than what they owe on the mortgage. The word “short” comes from the idea that the seller is short on the cash needed to pay off their loan. While these types of sales spike during bad economic times, especially the last housing crash around 2008, they tend to be rare in Georgia when the economy is growing and housing prices are rising.
When a buyer attempts to sell their home for less than what they owe, they need approval with their lender before the sale can proceed. Banks will only agree to a short-sale status if they believe it’s the best way to recoup part of their investment. Sellers should expect to file a variety of forms and documents, and they should expect an appraiser from the bank to evaluate the true value of their property.
Short sales have a variety of benefits to sellers. Rather than a disastrous foreclosure, sellers can save their credit scores and walk away from mortgages they can no longer afford. They can also save on selling fees and charges since the bank will be responsible for them. The home buyer gets the benefit of a reduced price and less competition.
Buyers and sellers who anticipate getting involved with a short sale in the residential real estate market can benefit from getting support and guidance from an attorney. These types of sales can involve a lot of complicated paperwork and regulations. Therefore, having a lawyer who can navigate the process can make things easier. Legal counsel could also mitigate the risks involved with a sale and ensure any contracts involved protect the interests of their client.