Short Sale Definition: A short sale occurs when a property is sold and the lender agrees to accept a discounted payoff, meaning the lender will release the lien that is secured to the property upon receipt of less money than is actually owed. A Short sale is different for every individual and care needs to be taken in the process including consulting with an attorney to verify this is the best option in your situation. You should also contact an accountant to see how this will effect your tax situation. This will also effect your credit or FICO score so be sure your are well informed when completing a short sale.
Example: If the unpaid balance of a loan is, say, $250,000 and a property sells for $125,000, under a short sale the lender might accept $125,000 as payment in full and release the lien on the property but may not forgive the different and still hold the person liable for the difference which in know as a deficiency judgement
‘‘You may stop doing business with us at any time. You may accept or reject the offer of mortgage assistance or short sale we obtain from your lender [or servicer]. If you reject the offer, you do not have to pay us. If you accept the offer, you will have to pay us (You pay nothing, we get a commission out of the approved short sale) for our services.’’RLM Properties is not associated with the government, and our service is not approved by the government or your lender.’’ ‘‘Even if you accept this offer and use our service, your lender may not agree to change your loan.