Basically, when a house sells for a price that is less than the seller still owes on the mortgage, that’s a short sale. If the owner cannot make the mortgage payments, many lenders will agree to accept the proceeds of a short sale and forgive the rest of what is owed on the mortgage.
If that’s the case, it means the seller’s lender is accepting a discounted payoff to release an existing mortgage. There are no guarantees that the lender will accept an offer that the seller accepts so the process for negotiating a short sale can be a lot longer than a normal sale.
Potential buyers need to be aware that the seller will need to be in default, to have stopped making mortgage payments, before a lender will consider a short sale. The seller might owe more than the home is worth, so a discounted price might bring the price in line with market value, not below it.
The seller must provide a hardship letter to the lender and may be liable for taxes on the amount of debt that is forgiven.
Homes for Sale in Erie County
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All statistics are gathered from the Buffalo Niagara Association of REALTORS®.
For more information, call our Myriad Team @ Keller Williams Lancaster at (716) 650-0051
Thinking of selling your Western New York home? Interested in finding out the current market value of your single family home, condo or investment property? Then call us at (716) 650-0051 to discuss what is happening in today’s Western New York Real Estate Market. We would be happy to give you a personalized Comparative Market Analysis for your home or assist you to purchase a home.