A Short Sale is when your lender agrees to let you sell your home for less than what you owe. Mortgage lenders may be willing to work with borrowers faced with a financial hardship to accept a discounted payoff on a mortgage. If you are faced with a hardship, and are unable to meet your obligation on your mortgage, your lender may prefer to settle the matter with you as opposed to taking the property through foreclosure. Hardships may include illness or injury, job loss or relocation, bankruptcy, divorce, negative equity, an
adjustment in your mortgage payment, or unforeseen increases in your living expenses. A second mortgage may complicate your ability to have a short sale approved. Homeowner need to be wary of potential liability for the deficiency if the house sells for less than the amount of the loan(s) and potential tax liability.
Buying and Selling Real Estate
If you use a real estate broker to sell your property, you will likely enter into a written listing agreement with a real estate broker. A broker may be willing to negotiate with you on the amount of commission received, the length of the listing, and what he or she will do for you to assist in selling your property. An earnest money agreement sets out the steps necessary to conclude the sale. It is essential that both parties understand the terms and consequences of the earnest money agreement. Once signed, the buyer and seller are legally bound to purchase and sell the property according to the terms in the earnest money agreement. The earnest money agreement may provide that the buyer will lose his or her deposit by backing out of the deal.
A policy of title insurance is issued by a title insurance company at the time of closing. A number of serious risks exist that a title insurance policy may not cover, such as claims for workmen’s liens not shown by the courthouse records, unrecorded easements, zoning restrictions, and rights of parties in possession. These are important matters to investigate even if there is title insurance. State law requires sellers to complete and give a written property disclosure to each individual who makes an offer to purchase. If the seller fails to provide a disclosure statement, the buyer may terminate the transaction. A whole property inspection is another important source of information regarding the condition of the property.
A deed transfers ownership of property from the seller to the buyer. There are several types of deeds, such as statutory warranty deed, special warranty deed, bargain and sale deed and quitclaim deed. The type of deed affects the buyers rights against the seller and all former owners. Typically, a homeowner gives a lien on his or her house to the bank as collateral for payment of a loan to the bank. There are four common types of liens on real property. Those are (1) a trust deed; (2) a mortgage; (3) a land sale contract; and (4) an involuntary lien. Banks and other lenders typically use a trust deed. Legal advice may be important to determine your rights under any real estate agreements or liens.
Real estate disputes may involve remedies for breach of real estate agreements, landlord/tenant disputes, disputes regarding boundary lines or encroachments, suits for quiet title or to partition common ownership, or access issues involving easements.
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