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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1 Photos 710 Rutledge Avenue Charleston, SC 29403

710 Rutledge Avenue
Charleston, SC 29403
Residential

MLS# 18028655 / Active
4 br, 1 ba, 1 half bath, 1800 sqft

Prime Location! Dowtown Charleston minutes from MUSC, Roper,The Citadel, Hampton Park, shopping, and the beaches. Home needs some work but has a l... 

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$400,000
Provided courtesy of AgentOwned Premiere Group
1 Photos 103 S Norfolk Way Goose Creek, SC 29445

103 S Norfolk Way
Goose Creek, SC 29445
Crowfield Plantation
Residential

MLS# 18028347 / Active Contingent
4 br, 2 ba, 1 half bath, 2797 sqft

Great short sale opportunity, make it your own! 4 bedrooms, 2.5 bathrooms with 2800 Square feet. Spacious Kitchen and formal dining room. Fa... 

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$225,000
Provided courtesy of Carolina One Real Estate
14 Photos 113 Winslow Lane Summerville, SC 29485

113 Winslow Lane
Summerville, SC 29485
Cross Creek Estates
Residential

MLS# 18028227 / Active
4 br, 2 ba, 1595 sqft

Great home with downstairs master bedroom in Summerville! Large lot with great fenced backyard! Come take a look today! 

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$201,000
Provided courtesy of RE/MAX Alliance
2 Photos 398 Furman Lane Ladson, SC 29456

398 Furman Lane
Ladson, SC 29456
College Park
Residential

MLS# 18027922 / Active
3 br, 2 ba, 1102 sqft

** MUST ACT FAST! LOOK AT THE PHOTOS FROM THE LISTING IN 2015 UNTIL AGENT GAINS ACCES TO THE PROPERTY! PROPERTY IS SET TO GO INTO FORECLOSURE AND A... 

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$165,000
Provided courtesy of Fred Holland Realty
1 Photos 5886 Ryans Bluff Road North Charleston, SC 29418

5886 Ryans Bluff Road
North Charleston, SC 29418
Covington Hills
Residential

MLS# 18027738 / Active Contingent
3 br, 3 ba, 3312 sqft

Short sale opportunity! 3 Bedroom, 3 bathroom ranch style home. Spacious eat-in kitchen with breakfast bar, walk-in pantry and wet bar. Formal... 

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$225,000
Provided courtesy of Carolina One Real Estate
14 Photos 164 Palm Cove Way Mount Pleasant, SC 29466

164 Palm Cove Way
Mount Pleasant, SC 29466
Dunes West
Residential

MLS# 18027640 / Active
2 br, 2 ba, 1 half bath, 2175 sqft

This exquisitely upgraded townhome, located in the exclusive Dunes West gated community has MARSH VIEWS from nearly every window making it a privat... 

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$399,000
Provided courtesy of Coldwell Banker Residential Brokerage
24 Photos 218 Tuscany Court Ladson, SC 29456

218 Tuscany Court
Ladson, SC 29456
Limehouse Villas
Residential

MLS# 18027500 / Active
3 br, 2 ba, 1 half bath, 2006 sqft

Beautiful 2-story home in quiet Ladson community! As you enter this home you'll immediately notice its rich wood floors and breezy, open floor plan... 

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$200,000
Provided courtesy of RE/MAX Alliance
6 Photos 1522 Boston Grill Road Mount Pleasant, SC 29466

1522 Boston Grill Road
Mount Pleasant, SC 29466
Hamlin Beach
Residential

MLS# 18026798 / Active
6 br, 6 ba, 1 half bath, 5497 sqft

Home priced below market value! BRING ALL REASONABLE AND SERIOUS OFFERS! A must see to appreciate. Home loaded with options i.e. walk-in closets,... 

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$475,000
Provided courtesy of Palm Realty Group, llc
56 Photos 7660 Blue House Lane Edisto Island, SC 29438

7660 Blue House Lane
Edisto Island, SC 29438
Blue House Plantation
Residential

MLS# 18025471 / Active
6 br, 3 ba, 2901 sqft

The Islands at Blue House - exquisite, ever changing views of wildlife, the creek, marsh,& N. Edisto from your classic lowcountry home nestled in a... 

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$799,000
Provided courtesy of Edisto Sales & Rentals Realty
14 Photos 6208 Fieldstone Circle Charleston, SC 29414

6208 Fieldstone Circle
Charleston, SC 29414
Village Green
Residential

MLS# 18025239 / Active
3 br, 2 ba, 1 half bath, 2104 sqft

Easy to show home in popular Village Creek. Large kitchen, separate dining room, screened porch, fenced back yard. First floor just painted. Privat... 

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$275,000
Reduced -$24,000
Provided courtesy of The Boulevard Company, LLC
1 Photos 112 Durham Drive Goose Creek, SC 29445

112 Durham Drive
Goose Creek, SC 29445
Crowfield Plantation
Residential

MLS# 18023620 / Active
4 br, 2 ba, 1812 sqft

 

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$219,500
Provided courtesy of Harbins Two, Inc
35 Photos 1704 Hopeman Lane Mount Pleasant, SC 29466

1704 Hopeman Lane
Mount Pleasant, SC 29466
Charleston National
Residential

MLS# 18022328 / Active
2 br, 2 ba, 1 half bath, 1920 sqft

Beautiful, low maintenance townhome tucked into a serene Lowcountry setting in a sought-after golf course neighborhood! Entering the neighborhood ... 

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$325,000
Reduced -$15,000
Provided courtesy of Carolina One Real Estate
15 Photos 1100 Legends Club Drive Mount Pleasant, SC 29466

1100 Legends Club Drive
Mount Pleasant, SC 29466
The Legends At Mt Pleasant
Residential

MLS# 18020090 / Active Contingent
1 br, 1 ba, 836 sqft

This 1bd 1ba condo is located conveniently in the Legends at Mt. Pleasant. It is an exclusive, gated community close to Charleston National Golf Co... 

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$145,000
Reduced -$22,000
Provided courtesy of Brand Name Real Estate
1 Photos 2465 The Haul Over Johns Island, SC 29455

2465 The Haul Over
Johns Island, SC 29455
Seabrook Island
Residential

MLS# 18018610 / Active
3 br, 2 ba, 1 half bath, 2514 sqft

Easy to show! Home needs updates, but in a great location in Seabrook Island. Back porch looks over an Egret estuary and has views of the golf cour... 

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$495,000
Reduced -$80,000
Provided courtesy of Harbins Two, Inc
31 Photos 5208 Mulholland Drive Summerville, SC 29485

5208 Mulholland Drive
Summerville, SC 29485
Wescott Plantation
Residential

MLS# 18017321 / Active
4 br, 2 ba, 1 half bath, 2370 sqft

Great home in the desirable Birkdale subsection of Wescott Plantation. As you enter into the first floor, you are greeted with a grand foyer and wo... 

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$245,000
Reduced -$14,000
Provided courtesy of Keller Williams Realty Charleston
9 Photos 619 Double Eagle Trace Seabrook Island, SC 29455

619 Double Eagle Trace
Seabrook Island, SC 29455
Seabrook Island
Residential

MLS# 18016763 / Active Contingent
1 br, 1 ba, 1 half bath, 817 sqft

SHORT SALE OPPORTUNITY! Enjoy the views of the golf course while sitting on the back deck of this 2-story townhome. 1 Bedroom/1.5 bathrooms with... 

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$85,000
Reduced -$4,000
Provided courtesy of Carolina One Real Estate
20 Photos 412 Sparkleberry Lane Ladson, SC 29456

412 Sparkleberry Lane
Ladson, SC 29456
Summerhaven
Residential

MLS# 18015792 / Active Contingent
4 br, 2 ba, 2173 sqft

Lots of potential with this 1 story home in Dorchester 2 School District with 4th bedroom over the garage. Fenced in yard, 2 car garage, fireplace,... 

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$189,900
Provided courtesy of ChuckTown Homes, LLC
1 Photos 108 Lisa Drive Summerville, SC 29485

108 Lisa Drive
Summerville, SC 29485
Greenhurst
Residential

MLS# 18015461 / Active Contingent
3 br, 2 ba, 1025 sqft

Cute 1 story brick ranch on large lot with 1 car garage. This would be a great house for an investor! Lots of potential. 

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$80,000
Provided courtesy of Carolina One Cane Bay/ Nexton
37 Photos 718 Royall Avenue Mount Pleasant, SC 29464

718 Royall Avenue
Mount Pleasant, SC 29464
Old Village
Residential

MLS# 18014472 / Active Contingent
4 br, 3 ba, 1 half bath, 3959 sqft

One of the most secluded settings in the Old Village. Beautiful mature landscaping surrounds this spacious home. Versatile floor plan allows for fi... 

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$949,000
Reduced -$146,000
Provided courtesy of The Cassina Group
4 Photos 2945 Cathedral Lane Charleston, SC 29414

2945 Cathedral Lane
Charleston, SC 29414
Old Towne Villas
Residential

MLS# 18013825 / Active
3 br, 2 ba, 1 half bath, 2089 sqft

End unit Townhome located just off of the golf course. Home is conveniently located near hospitals, West Ashley High School, restaurants, grocery s... 

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$195,000
Provided courtesy of Harbins Two, Inc
37 Photos 181 Blackwater Way Moncks Corner, SC 29461

181 Blackwater Way
Moncks Corner, SC 29461
Fairmont South
Residential

MLS# 18013031 / Active Contingent
4 br, 2 ba, 1 half bath, 2891 sqft

Located in the heart of Moncks Corner, you will be close to schools, shopping, and restaurants! Walking in you are greeted by smooth ceilings, crow... 

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$256,000
Increase +$1,000
Provided courtesy of RE/MAX Alliance
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Broker Reciprocity The data relating to real estate for sale on this web site comes in part from the Broker ReciprocitySM Program of the Charleston Trident Multiple Listing Service. Real estate listings held by brokerage firms other than Carolina One Real Estate are marked with the Broker ReciprocitySM logo or the Broker ReciprocitySM thumbnail logo (a little black house) and detailed information about them includes the name of the listing brokers. Last updated on 10-22-2018 6:04pm est. The broker providing these data believes them to be correct, but advises interested parties to confirm them before relying on them in a purchase decision. Copyright 2018 Charleston Trident Multiple Listing Service, Inc. All rights reserved.
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