Escrow & Title
A 'short sale' in real estate occurs when:
AA property is sold in less than 30 days
BThe property is sold for less than the outstanding mortgage balance, with lender approval✓ Correct
CA seller accepts an offer below listing price
DA property sells within the first week of listing
Explanation
A short sale occurs when the property is sold for less than the amount owed on the mortgage, with the lender agreeing to accept the proceeds as full or partial satisfaction of the debt. The lender's approval is required.
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Key Terms to Know
Short Sale
A sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
Transfer TaxA tax imposed by state or local governments when real property ownership is transferred, typically based on the sale price.
Option ContractA contract giving the buyer the right, but not the obligation, to purchase a property at a specified price within a specified time period.
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