The Short Sale Information and Advisory is intended to give general information regarding short sales, their potential impact, and the rights and responsibilities of the parties involved. A short sale is the name used to describe a transaction where the seller’s lender agrees to allow the property owner to sell the property for less than the amount of the loans secured by the property. In these cases, it is the seller who picks the winning offer, but the bank is needed to approve the sales price. It is important that buyers realize that the approval process usually takes 30-60 days before the home goes into escrow, and is not guaranteed to receive approval.
Sellers may explore other options prior to selling their home as a short sale to prevent long term damage to their credit. Beginning on July 15, 2011, it was determined that any lender to approves a short sale in writing is not permitted to seek or collect a deficiency against the borrower if the loan is secured by a Trust Deed on a residential property containing 1-4 units. It is important that Sellers read this document very carefully to understand the consequences a short sale will have on their credit score and future borrowing capabilities.