A SHORT SALE IS ANYTHING BUT SHORT
As a New Jersey real estate lawyer, I frequently represent clients in short sale negotiations. Many clients view the short sale as an easy process, however, there can be quite a few hoops to jump through. Most short-sales are anything but short, so unless you understand what a short-sale means, the name can be misleading. A short-sale is essentially a sale of a property for less than the value of the lien(s) (e.g., mortgage(s)) encumbering it.
In order to make a short-sale happen, all lien-holder(s) having a lien against the property will most likely have to agree to release their lien for less money than they are entitled to under the said lien. Having a lien-holder(s) agree to do this is one (1) of the main reasons a short-sale takes so much time. The reason being is the lien-holder(s) has to do its due diligence to make sure that the property is being sold at or close to the fair market value, as it wants to make sure that it is getting as much of the amount it is entitled to under the lien as possible. The lien-holder(s) also wants to see whether it is feasible to pursue the amount it is forgiving from the borrower (i.e., seller). As a result, the lien-holder(s) needs to investigate both the property and the financial situation of the borrower/seller, which takes time.
It is important to make sure that you have an attorney who understands the law with regards to foreclosure, bankruptcy creditor’s rights, etc, as well as the real estate market. The reason being is an attorney who understands the foregoing, will be better able to explain to a lien-holder(s) why it should release its lien for a lesser amount than it is entitled to receive. If an attorney does not understand these areas of the law and how they interact with one another, it can be the difference between obtaining the short-sale approval of the lien-holder(s) or having an offer rejected.
The above are all things that need to be considered if you are contemplating selling or buying a property via short-sale.
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