Contracts
What is a 'short sale' in Idaho real estate and what challenges does it present?
AA sale that closes very quickly
BA sale where the seller's proceeds are less than the mortgage balance, requiring lender approval for a discounted payoff✓ Correct
CA sale of a small property
DA sale of property in bankruptcy court
Explanation
A short sale occurs when a property is sold for less than the outstanding mortgage balance, requiring the lender's approval to accept less than full payoff. In Idaho, short sales involve complex negotiations, potential tax implications (mortgage forgiveness income), and typically longer closing timelines due to the need for lender approval.
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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.
ContingencyA condition in a purchase contract that must be satisfied before the sale can proceed to closing.
Earnest MoneyA deposit made by the buyer when submitting a purchase offer, demonstrating serious intent and serving as consideration for the contract.
Purchase AgreementA legally binding contract between a buyer and seller that outlines the terms and conditions of a real estate sale.
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