Originally Posted by Krusher33
<-- don't know what short sale is.
It is when someone sells a house for less than what they still owe the lender for it.
The lender has to approve it, as they will be taking a "loss" on the deal, and have to weigh the short sale loss against the potential loss involved with other alternatives.
Short sales typically only happen if the current owner is in financial trouble that makes them unable/unwilling to continue paying for the house, or must sell the house for some other reason, AND more money is still owed on the house than it is worth in the current market.
Short sales have become much more common because the alternative, usually either foreclosure or restructuring a current loan, typically involves more of a "loss" than the short sale.
Short sales are WAAAAAYYYYYY better for a seller than getting foreclosed on, because in a short sale they walk away clean.
In a foreclosure, the person ends up owing the difference between what the house ends up getting unloaded for and how much was still owed on it, plus a boatload of fees and penalties.
6 years ago I bought my current house on a foreclosure deal, 3 months after the lender rejected a short sale offer, forcing things into foreclosure.
It worked out for me because I got the house for slightly less than the original short sale offer, and retained the mineral rights.
The bank lost because the foreclosure cost them money, they got a little less for the house, and they didn't get to retain the mineral rights like the original short sale offer stipulated.
The previous owner got boned because they are stuck with about a $12k debt, and a foreclosure on their credit record.
As for the mineral rights, the property is over one of the natural gas rich parts of Barnett shale, and I've made close to $10k so far off the up front payment, and quarterly royalty payments, for leasing them out. Edited by Caleal - 10/1/12 at 8:01am