Short sale of property means sale of property valued for less than the amount due on the loan.

Short sales can be a win/win in a losing situation. Borrowers may be relieved from their debt and lenders may save the time and costs of a foreclosure. In a short sale, the borrower,(seller) negotiates with the lender to allow a sale of the property either to a third party or back to the lender in lieu of foreclosure, and the lender will in turn require either a gross, net or minimum payoff

GROSS PAYOFF

  • lender is paid the amount the property is sold for
  • sellers are responsible for all closing costs

NET PAYOFF

  • lender is paid the net prceed after all closing costs are paid

MINIMUM PAYOFF

  • lender requires a specified minimum amount of proceeds
  • seller may be entitled to the surplus proceeds and is usually responsible for all or a portion of the closing costs
  • seller may have to bring money to satisfy the lendre's minimum payoff requirement