Short Sales Explained By Delaware Real Estate Attorney
We’ve all been reading about the declining value of homes and short sales, but what exactly is a short sale? Let’s assume you bought your home 10 years ago for $250,000. You put 10% down and got a mortgage for $225,000. Now you’re trying to sell your home, and your real estate agent tells you that the most you could get for your home is $199,000. The problem with this is that even assuming you got an interest rate of 5% when you bought your home, you still owe your mortgage company over $206,000. When you add on $15,000 in closing costs for such things as the real estate commission and transfer tax, in order to sell your home you’d have to come up with over $20,000 in cash at the closing.
One solution could be a short sale. Using the example above, a short sale means you sell your home to a buyer for $199,000, and your mortgage company agrees to accept less than the $206,0000 you owe so that you won’t have to come up with the cash at closing.
This is the first in a series of articles about short sales. As we will see in future articles, short sales can be complicated, and you should get the help of an experienced attorney to handle it for you.
