About Short Sales

There are some lenders willing to accept less than the full amount due on a mortgage loan. This is commonly referred to as a “short pay” or “short sale.” Generally, a buyer will be willing to purchase the property from a seller in foreclosure at a "short sale" amount. The benefit to the seller is that it ends the foreclosure process. It also keeps further derogatory information from being placed on the credit report.

The reasons a lender may accept a short sale are varied. However, from the lender’s perspective, a short sale saves many of the costs associated with the foreclosure process, including property maintenance, taxes, and utilities. In this way a lender can "mitigate (minimize) their losses", especially in a falling market.

More About Short Sales

The lender will want information from the owner/borrower, information about the property, and the exact terms of any short sale deal. Lenders will ask for a hardship letter and specific financial information. They use this information to establish that an owner is not financially able to pay off the loan. The lender needs to see a written contract between the owner and the buyer to make sure the owner isn’t walking away with any cash from the deal. Our professional team within the Luxor Group will guide you through all of the steps during a short sale.

Keep in mind that if a lender agrees to accept less than what is owed (short sale), you may be taxed on the difference. For example, if a property owner owes the lender $400,000 and the lender agrees to let the property owner sell the property for $350,000, the property owner can be taxed on the $50,000 difference. As we speak, the US congress is working on legislation to end this potential "tax hit" on property owners in foreclosure. It is important to consult with a qualified tax professional when it comes to any financial decisions.

We are here to help you. Once again, feel free to contact us at any time.

The Luxor Homes & Investment Realty, LLC has an experienced team who has negotiated short sales with many lenders. We will ask the lender to agree to a payment of our commission from the short sale proceeds. There are no out of pocket expenses for you. If you need more information, please fill out the form below.

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Our company and this site provides its users methods to reduce and/or control debt. We also discuss foreclosure. The information that is provided is designed to help users safely cope with their own needs. However, legal information is not the same as legal advice. The law as it applies to each individual varies from State to State and it is dependent on the individuals specific circumstances. If you do not understand the procedure or law in your jurisdiction, we encourage you to consult with an attorney in your jurisdiction at anytime.


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