It may be just a short sale. It could even be a house you have never put a penny of your money into. (There was a time when folks were getting 100% loans plus the closing costs added on as well.)
Those days are gone and some now find themselves in a hardship situation due to the tough economic times. They are now doing a short sale.
A short sale means there will not be enough money to cover the mortgage balances. And the deficiency must be dealt with by the parties.
I have seen some lenders waive the balance while others have requested the seller bring cash to close or sign a personal note. You usually never really know until the offer has been received and the negotiation starts.
Regardless, this deficiency is the reason why all short sale sellers should care enough to get the best price possible for their house or condo.
That means hiring a good real state agent who will represent you well in the process. It includes a seller taking responsibility to make sure the home is maintained in the best condition possible and shows well. It means negotiating any offer to get the most money possible for the lender (and yourself!). I have heard some say, regardless of offer amount, "I will sign and just let the bank decide!" That is not an approach I would recommend.
Sure, you may be playing with OPM (other people's money) but it is your credit and future that is in play as well!
If you are a Brevard County Florida home owner and considering a short sale, give me a call at 321-693-3850 or email me.