Short Sale Deficiency Balances: What Are They and How to Avoid Them
When the lender agrees to do a short sale, that means the lender is accepting less than the total amount due on the property. For complete details on this you might want to read my post on “Short Sales 101”. But for our purpose here I am going to assume that you not only know what a short sale is, but that you understand the term.
Now I have noticed numerous comments about the possibility of a deficiency balance after a short sale. I have also received a lot of email questions and telephone calls from agents asking about what to do if the bank release does not specifically state that the short sale is in full satisfaction of the debt. In this article I will go over what you need to know to make sure this does not happen to your client.