Short Sale Terminology

SHORT SALE



Short Sales are a hot topic today in real estate.

Short Sales are a distinct process supported by its own terminology. We often forget sometimes that not everyone is in the real estate business, and the language can seem confusing! The following is a summary of the most common terms that a buyer and seller should be aware of when purchasing or selling a short sale property:

•Short Sale: When a lender agrees to accept less than what is owed on the mortgage and release its lien on the property.
•The Property is "upside down": This phrase is commonly used to describe a situation where the amount due on the existing loan is higher than what the property is appraised for or will sell for.
•Loss Mitigation Department: The department at the lender that is responsible for reviewing all short sale documentation, ordering a BPO, and approving or denying short sale.
•BPO: Brokers Price Opinion (BPO), typically ordered by lender, is a property valuation report to help determine what the property might sell for.