What is the definition of "Short Sale" - Posted by Burton

Real Estate Investing
1

Posted by Darin on March 14, 2000 at 20:21:20:

I am to new in notes to answer anything.

2

What is the definition of “Short Sale” - Posted by Burton

Posted by Burton on March 14, 2000 at 13:59:57:

What is it in laymans’ terms?

Thanks;
Burt

3

Re: What is the definition of “Short Sale” - Posted by John Behle

Posted by John Behle on March 14, 2000 at 22:36:20:

A short sale is getting a lender to accept less than what they are owed. This is usually in conjunction with a sale of the property.

Example. The property is over mortgaged. It is worth $80,000 but the mortgage balance is $90,000. The broker, buyer or seller approaches the mortgage company to take the 80k instead of the full 90k that is owed.

This allows the property to be sold and the lender doesn’t end up with a foreclosure where they would lose at least that much or more. Short sales are primarily used with lenders, but can apply to private seller financing as well.

I’ve used this with private lenders for years as well as the institutions. I’ve called it the “discount refinance” and it is a way to help out an over mortgaged situation or to make profit on a more normal situation. When the note holder doesn’t want to take a discount, we trade them another note. Note for note. I call that the “Discount Substitution”.

This is different than the technique of buying a note at a discount and trading it for the property. We call that the “paper trade”. There’s some posts about dealing with lenders on short sales and how to negotiate with them at my website. One in particular talks about how to negotiate with lenders and is titled “Discounting lenders - negotiations”. Click on “Paper Posts” at www.papergame.com and go to the miscellaneous posts section.

4

Discounting mortgage payoff - nt - Posted by Darin

Posted by Darin on March 14, 2000 at 15:15:19:

nt

5

Re: Discounting mortgage payoff - nt - Posted by Brian Talley

Posted by Brian Talley on March 14, 2000 at 19:56:30:

How would I go about getting a seller to accept a note for real estate, and then to sell the notes(s) at a discount?