Legal Implications of a Short Sale

Short sales allow a homeowner to close on the sale of property when it is worth less than the debts secured by it. Typically, the lender agrees to accept the net proceeds from a closing in exchange for releasing its lien. Lenders are not agreeing to a short sale to be generous, they are convinced that it will come out better than it would by foreclosing on the home and pursuing the borrower for its losses.

While the procedures for a short sale will vary from lender to lender, most lenders need to be convinced of the following:

The Sales Price Is Not Too Low 

The sales price of contract is equal to what they would be able to sell the property for after a foreclosure. While the lender may review the market analysis provided by the agent, they will often confirm the market analysis by contacting its own sources, such as an appraiser.

All Costs Associated With The Sale

The commission for the transaction is equal to the commission it would pay its agent for selling the home after foreclosure. The lender will need to know as precisely as possible the amount of proceeds it can expect to receive from the sale.

A Good Reason They Should Accept It

The lender will want an explanation of the circumstances, which caused short sale in the first place. These usually include death, medical problems, divorce, loss of a job, or a job displacement requiring a move.

A Financial Package On The Seller

The seller doesn't have the resources to make up the mortgage shortfall on their own. The lender will require a full assessment of the financial condition of the seller. Financial statements, income and expenses, tax returns and the seller's paycheck stubs should be provided. The seller's financial condition is a tricky proposition. While the lender will be reluctant to approve a compromise without reviewing strength of the seller, this information will help the lender in pursuing the seller for a post-foreclosure deficiency if the short sale does not take place.

So What Is The Risk?

A seller with few assets, little or no income, and a willingness to file bankruptcy has little to lose by providing this information. Those with other assets, a good job with garnishable wages, or a desire to avoid bankruptcy will put themselves at risk in the process. Those considering a short sale need expert legal advice regarding the wisdom of submitting financial information to the lender.


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614 Deepwood Court
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Crystal Shores

MLS# 17013245 / Active
3 br, 2 ba, 1632 sqft

Horton Manufactured Home Being Sold in Strictly ''As-Is'' Condition. Note that this is a Short Sale which Must be Approved by all Lienholders. Add... 

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Provided courtesy of Coldwell Banker Residential Brokerage

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MLS# 17012889 / Active
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You will fall in love with this extremely spacious and open floor plan. Walking into the formal living/dining room with the high ceilings, crown mo... 

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Reduced -$10,000
Provided courtesy of Carolina One Real Estate

110 Conquerors Lane
Moncks Corner, SC 29461
Highways 17-a / Old 52 / New 52

MLS# 17012643 / Active
4 br, 2 ba, 1432 sqft

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Provided courtesy of AgentOwned Premiere Group

1851 Woodland Road
Charleston, SC 29414
Pier Point

MLS# 17012449 / Active
2 br, 1 ba, 1041 sqft

Great first home, 2 bedroom and 2 bath located in West Ashley. Inside is recently renovated top to bottom with new hardwood floors, cabinets, appli... 

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Provided courtesy of Sadler Group of Charleston LLC

52 Creek Bend Drive
Summerville, SC 29485
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MLS# 17011903 / Active
4 br, 2 ba, 1 half bath, 1841 sqft

You can own this beautiful 3 story Charleston single home with 4BR,2.5BA in the heart of Summerville. Stunning double front porches. Hardwood floor... 

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Provided courtesy of Brand Name Real Estate

5634 Blackwell Avenue
North Charleston, SC 29406
Charleston Farms

MLS# 17011821 / Active
3 br, 1 ba, 952 sqft

Easy to Show!!! Looking for a house that has tremendous potential? This home is an investors dream. Located 1 mile from Park Circle, in an up and c... 

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Provided courtesy of Harbins Two, Inc

757 Lookout Point
Mount Pleasant, SC 29464
Coopers Pointe

MLS# 17011145 / Active
3 br, 2 ba, 1972 sqft

** Handyman Special ** Short Sale w/ too Many Liens to List, Buyer will have to hire an Attorney Upfront at Costs of $5000 or more to try and clear... 

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Provided courtesy of REMAX Advanced Realty

860 Hammocks Way
Edisto Island, SC 29438
The Hammocks

MLS# 17010236 / Active
4 br, 4 ba, 1 half bath, 4361 sqft

Stunning Estate on Scott Creek overlooking the Atlantic Ocean, architected after the William Seabrook Plantation home, located in The Hammocks on E... 

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Provided courtesy of Carolina One Real Estate

105 Round Table Lane
Goose Creek, SC 29445
Camelot Village

MLS# 17010012 / Active
4 br, 2 ba, 1730 sqft

This short sale is just waiting for a perceptive buyer. Great location, easy access to Goose Creek, Ladson, North Charleston and I-26. 3 Bedrooms o... 

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Provided courtesy of AgentOwned Premiere Group

1142 Moss Grove Drive
Moncks Corner, SC 29461
Moss Grove Plantation

MLS# 17009470 / Active
4 br, 3 ba, 2154 sqft

LOCATION LOCATION LOCATION ... Come check out this home in Moss Grove!! This is a military relocation!! This 4 bedroom 3 bath home has beautiful ... 

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Reduced -$5,000
Provided courtesy of RE/MAX Cornerstone Realty

2030 Coldspring Drive
North Charleston, SC 29406
Woodhill Place

MLS# 17008931 / Active
2 br, 2 ba, 945 sqft

Cute 2 bedroom, 2 bath condo with fireplace in quiet neighborhood. Private screened in patio overlooks duck pond. 2nd floor unit. Close to intersta... 

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Reduced -$10,099
Provided courtesy of AgentOwned Realty Co. Premier Group, Inc.

2795 Summertrees Boulevard
Johns Island, SC 29455

MLS# 17006709 / Active
4 br, 2 ba, 1 half bath, 2012 sqft

Now this is an Approved Short Sale!! No long waits, just submit your clients offer. Pride in ownership in this home and it shows. Gleaming hardw... 

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Provided courtesy of Be Local Homes

3643 Hilton Drive
Johns Island, SC 29455

MLS# 17006259 / Active
3 br, 2 ba, 1711 sqft

HANDYMAN SPECIAL! Roomy ranch in desirable subdivision*Hrdwd flrs,200amp box,almost-new ROOF,f'place in one of two dens & wood-stove in other,well-... 

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Provided courtesy of Owen G Meislin Real Estate

415 Parkdale Drive
Charleston, SC 29414
Carolina Cove

MLS# 17005159 / Active
2 br, 1 ba, 1 half bath, 868 sqft

Wonderful condo under 100,000. Great amenities with pool, workout center, dog park, playground and many other perks at a wonderful price. Downstair... 

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Provided courtesy of John Poston & Company, Inc.

335 Estates Drive
Walterboro, SC 29488
Sweetbriar I

MLS# 17003268 / Active
3 br, 2 ba, 1 half bath, 2200 sqft

Welcome home to this gorgeous 3 bedroom 2.5 bath home located in the quaint neighborhood of Sweetbriar I. Very spacious, and could easily get a 4th... 

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Provided courtesy of Oswald-Cole & Associates Inc.

106 Ayers Circle
Summerville, SC 29485
Salisbury Acres

MLS# 17002199 / Active
6 br, 4 ba, 4082 sqft

Rare find in Summerville. This home was completely remodeled in 2011 to include new electrical and plumbing.This is no cookie cutter home! The ext... 

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Reduced -$15,000
Provided courtesy of AgentOwned Premiere Group

214 Forest Circle
Summerville, SC 29483
Oakdale Estates

MLS# 17000231 / Active
3 br, 1 ba, 1 half bath, 1431 sqft

SHORT SALE SHORT SALE SHORT SALE -- Located in the heart of Summerville, you will be close to schools, shopping, and restaurants! Walking in you ar... 

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Reduced -$10,000
Provided courtesy of RE/MAX Alliance

127 Meadowvale Lane
Moncks Corner, SC 29461
Spring Grove Place

MLS# 16031581 / Active
3 br, 2 ba, 1 half bath, 1694 sqft

SHORT SALE SUPER BARGAIN! PRE-APPROVED BANK PRICE! You have found a great 3 br. 2 1/2 ba. perfect family-friendly subdivision. This house has ev... 

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Reduced -$5,000
Provided courtesy of The Boulevard Company, LLC

410 Converse Court
Ladson, SC 29456
College Park Duplexes

MLS# 16029076 / Active
2 br, 2 ba, 1014 sqft

2 bedroom 2 bath duplex Large great room with brick fireplace. nice size kitchen with a breakfast bar. large common area behind home for the kids4... 

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Reduced -$10,000
Provided courtesy of Carolina One Real Estate

8399 Longridge Road
North Charleston, SC 29418
Appian Landing

MLS# 16027726 / Active
5 br, 2 ba, 2845 sqft

A whole lot of house for a large family. Large enough to even take care of aging parents. A two store adjoining wing, with private entrance, offe... 

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Increase +$20,000
Provided courtesy of Keller Williams Realty Charleston West Ashley

9 Solomon Court
Charleston, SC 29414

MLS# 16012684 / Active
3 br, 2 ba, 1 half bath, 1802 sqft


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Increase +$20,100
Provided courtesy of Harbins Two, Inc

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