What is a short sale of a house?

Answer 1

A Short Sale is when a servicer of the mortgage, the lender, takes less than what is owed on the mortgage, a shortage. For a Short Sale to even take place, someone must be getting "shorted." In this case, it would be the lender who services the mortgage(s). Typically, a Short Sale arises when a homeowner is behind on mortgage payments and owe more on the property than what it is actually worth, which means it is "upside down."

Answer 2

Now, for the sake of argument, let’s say the value value on the property is only $80,000. This is what an investor, someone like us, would be willing to pay for it. If we paid any more, with all the repairs we have to do, holding costs, paying utilities, insurance and taxes on it for a few months then selling to someone else, we would never make a profit on the house – and we are a for profit business. A buyer would not be willing to pay more than the $80,000 value of the home.

This means you can’t sell your house, because you know that you’d have to come up with the 20 grand difference there to pay off your mortgage balance. The lender is not going to sell it unless they approve a short sell. In other words the lender can allow you to sell your house for less than what you owe.

Go to the mortgage company, or the person holding your mortgage, like Wells Fargo, Bancorp South, Citibank or whoever it is here locally. You have been paying 600 or 1,000 bucks a month for the past few years, and hopefully you have built a good relationship with them. You can talk to them and see if they would consider selling less than the mortgage value. This is a short sale.

We Buy Houses, Memphis helps people by buying their property and being able to do this at a decent price. Getting a reasonable offer from a buyer with a solid reputation may be something the lender would consider in making their decision about a short sale.

If the bank forecloses on a property it will go up for auction and there is no telling what the house will ultimately sell for. We can take on the property at the near current value, fix it up and sell it. In the process we not only improve the condition of the house but we add value to the neighborhood.

The most important thing is to communicate with your lender. Make sure they are aware of your current situation and your willingness to work to make things work out best for everyone involved.

So there you go, guys. That’s what a short sell is. Hopefully this helps.

We Buy Houses Memphis buys hundreds of houses each year in Memphis, Tennessee. We purchased 250 homes last year. In 2020 we are on track to buying even more. We’re your “go to” place to find options to help you sell your house fast, for a discount or if you’re having some sort of difficulty.

Contact us at 901-250-0100