When it comes to short sales, both sides of the process can be tricky. If you're the short seller, the bank can sue you for the loan balance on the home, so it's important to protect yourself. So-called "deficiency judgments," in which a borrower can't pay back a loan, are legal in most states, but not all. Talk to an experienced real estate agent or attorney to find out what the laws are in your state. In many cases, you can require that the bank waive the right to come after you for the difference as part of the short sale agreement.
For more information, check out the links below.
- Andriotis, AnnaMaria. "Are You Buying Into a Good Neighborhood?" SmartMoney. Dec. 15, 2010. (Feb. 25, 2011)http://www.smartmoney.com/personal-finance/real-estate/are-you-really-buying-into-a-good-neighborhood-1292360513981/
- Armour, Stephanie. "Home sellers frustrated as short-sale deals collapse." USA Today. Aug. 5, 2009. (Feb. 24, 2011)http://www.usatoday.com/money/economy/housing/2009-08-04-short-sales-mortgages_N.htm
- Bank of America. "Selling your home in a short sale." (Feb. 24, 2011)http://homeloanhelp.bankofamerica.com/en/short-sale.html
- Broemmel, Mike. "Short Sale Deficiency Judgment." San Francisco Chronicle. (Feb. 25, 2011)http://homeguides.sfgate.com/short-sale-deficiency-judgment-7220.html
- Dempsey, Bobbi. "10 steps to 'short sale' buying." Bankrate.com. Jan. 12, 2010. (Feb. 25, 2011)http://www.bankrate.com/finance/money-guides/10-crucial-steps-to-short-sale-buying-1.aspx
- MortgageOrb.com. "Survey Finds Short Sales Closings Can Take Up To Nine Months." Feb. 24, 2011. (Feb. 25, 2011)http://www.mortgageorb.com/e107_plugins/content/content.php?content.7899
- National Association of Realtors. "Is Inexperience Hampering the Short Sale Process?" REALTORMag. Jan. 28, 2011. (Feb. 24, 2011)http://www.realtor.org/rmodaily.nsf/pages/News2011012803
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