What is a short sale? It’s a situation when you’re trying sell your house and you owe more than what your buyer has agreed to pay.
Recently I asked an attorney, “When a bank agrees to a short sale, does the seller still owe the difference to the lender? He told me that it depends. You won’t know until the complete short sale package is submitted and the lender has a chance to review it. Sometimes the lender will ask the borrower to sign a note for the deficiency, especially when the lender is looking at a substantial loss. When they don’t say one way or another in response to your submitted package, you must assume that they have not agreed to give up the difference.
Most sellers that I talk to assume that, when a short sale is completed, they won’t owe anything afterwards. That is not necessarily the case. Please be careful! It would be wise for you to consult a real estate attorney before completing the transaction. There are those out there who are trying to take advantage of you.
What are your experiences?