Short Sale Terms

There are so many terms when it comes to short sale , it seems like it's a foreign language. Here is a break down of the basic terms :

Lender - This is the bank that you have the loan with. Everyone has at least one lender while others have multiple lenders on one property.

Borrower - That is the person who's name is on the loan. Look at your loan documents to see who owns the loan. There is a difference of who owns the property and who owns the loan.
Short Sale - This is when the lender will agree to accepting less than what is owed on the property.

On the Market - When you hire a real estate agent to list the property on the MLS (Multiple Listing Service), they are advertising your property to everyone to get it sold.
Offer - This will consist of a Purchase and Sale Agreement that states the price and terms of how the Buyer wants to buy your property.

Addendums - Your real estate agent will have a lot of paperwork for you to sign. Make sure you understand all the stipulations.

Multiple Offers - This more than one offer on the same property. They will all have different price and terms.

Contingencies - These are different ways for the Buyer to get out of the transaction and not buy the house.

Financing Contingencies - If the Buyer's lender does not loan the money to the Buyer, they can get out of the transaction.

Inspection Contingencies - After the Buyer inspects the property and decide not to buy it, they are able to get out of the transaction.

Net payoff - After all the closing costs are paid, the left over amount it the net payoff that the lender will accept for a short sale.

Mutual Acceptance - When both Buyer and Seller agree to the price and terms of the agreement to buy the property.

Short Sale Package - All the paperwork that is needed for the Lender to decide if they are going to accept a short sale.

BPO (Broker's Price Opinion) - A real estate agent that is not involved in this transaction will inspect the property and give the bank the opinion of what the value of the property is.
HUD - This is the closing statement that shows all the amounts that will be paid at closing and who the money goes to.

Closing Costs - This consists of homeowner association fees, recording fees, escrow/closing agent fees, any and all taxes to sell the property, etc.

Closing Agent - In some states this is a real estate attorney. In other states, you can have an escrow agent close the transaction .

These are some of the basic terms that you will hear or get familiar with as you are in the process of the short sale.

Ernesto Vega
www.RWSF.com