If I Short Sale, Will I be Liable for the Difference of the Sale and What I Owe???
If your home is “under water” or “upside down” and the lender approves a short sale, the difference of what you owe on the note (your loan) and what the home actually sells for, is waived by the lender, unless you agree to be responsible for it.
For example, assume you originally bought your home for $200,000, and now it’s worth $100,000. The lender approves a short sale, of $100,000, making the short sale difference $100,000. After this sale closes, you have no liability to the lender for the $100,000 short sale difference, unless you agree to pay the $100,000 back to the lender.
If you’re short selling, you MUST READ THE SELLER APPROVAL DOCUMENTS CLOSELY. Be cautious of what realtors are telling you. Remember, they are not attorneys. If you are considering a short sale, it is always recommended that you seek the advice of an experienced attorney in Arizona, who is familiar with this area.