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What is a Short Sale Anyway?

An increase in foreclosure rates will inevitably bring with it an increase in short sales. But what is a short sale?

A short sale happens when you sell your house for less than your remaining mortgage balance, the proceeds of which go to the lender and in return the lender forgives the remaining balance. Selling your home as a short sale is one way to avoid foreclosure.

As a general rule, lenders lose money when they foreclose on a property. Consequently, they would rather not have to foreclose if it can be avoided. A short sale represents an opportunity to cut their losses because a short sale usually allows them to recoup more of the cost of the loan than a foreclosure process would.

However, don’t think that a short sale is an easy thing to accomplish. In order to get permission for a short sale, you must provide documentation showing a genuine financial hardship. And don’t think that the decision for accepting a short sale is solely in the hands of the lender. Sure the lender must first agree, but this is not the final word. If there is mortgage insurance involved, this company also gets input on the decision. If there is an investor backing the mortgage, they also get input as to whether to accept a short sale.

The transaction process for a short sale can be rather cumbersome as well, whether you’re on the buying or selling side. Many short sales fail due to additional demands by the lender, such as requiring the broker to reduce his or her commission and/or that the seller signs a document requiring him or her to pay back the shortfall.

If you’re on the selling side of a short sale, consider having your agent or other experienced professional negotiate with your lender for a better deal. And remember, if the lender does accept a short sale and forgives part of your debt, that is considered taxable income and you must declare it as such to the IRS.

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Cindy Paterson 
Email- cindypaterson.realtor@gmail.com
Cell: 405-473-3239
Metro Brokers Of Oklahoma
Office: 405-520-8963
Fax: 405-703-3255
License #138626

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Testimonials

Cindy is the utmost professional bringing all her expertise but also a personable, friendly perspective during a house hunt. She helped us look ALL DAY LONG and gave us terrific advice and feedback. She helped us purchase our dream house and we highly recommend her. We hope to stay in this home forever but if we ever did move again, there would be no doubt who to call. Julia Wagner Leinen
Cindy was such a blessing to my husband and I when we were looking to buy our first house. She carefully sought out houses and neighborhoods that's would fit our needs. She gave us multiple options and was always available when we had questions. When we finally decided on a house, she did an awesome job communicating with the sellers, and working out a great deal for us! I thought buying a home would be so stressful and hard because we are young and don't know much about real estate. But with Cindy, it was a breeze and an exciting process! I can't think of anyone else I would rather have partnered with when looking for a home for my family! Mike and Kaci Moore
Cindy is a superb realtor and guided us through every step of the home-buying process with the upmost professionalism. She was easy to reach and always kept us updated on the status of our paperwork. We couldn't be more be pleased with Cindy and recommend her without hesitation to anyone wanting to buy or sell a home. Brian and Maria Sargent
Cindy was so easy to talk to & made us feel comfortable as she walked us through the processes step by step. She updated our education on Oklahoma properties. When I was fretful, she would remind me that God would lead us to the right place. After a snafoo after closing, she jumped at the chance to make things right. Thank you, Cindy! Don and Sue Ann Wagner
I know she's my mom, but she worked her hinny off helping Brandon I buy a house in 2013! She was so patient and helpful! Brandon and I didn't know the first thing about buying a house, credit, or anything and she walked is through it! Brandon and Ashley Kirby
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