Be Mindful Of The "Short Sale"

Sellers often assume that the sale price of their home will be enough to pay out the costs and financial obligations associated with the sale, but that's not always the case, especially in a slow real estate market.

A "short sale" occurs when the amount outstanding under a seller's mortgage, along with other payout obligations and closing costs, is greater than the sale price of the home. REALTORS® acting for sellers should be mindful that, if a sale price is not sufficient to payout all of the associated financial obligations and closing costs, the entire transaction may be in jeopardy.

Generally, the Contract of Purchase and Sale (CPS), together with the standard conveyance process for a residential purchase and sale transaction, obligates the seller to pay the following in full by the completion date: