Short Sales: Full Disclosure Needed.

As home prices continue to move lower the number of homeowners who will face a potential short sale scenario when they sell will continue to rise. This article from Realtor.mag stresses the importance for realtors to confirm with the sellers as to their financial situation relative to their existing mortgage. Many sellers may feel embarrassed to reveal the fact that they owe more than they will likely sell for. Realtors should note in writing the response from the seller. Many sellers may in fact not be in a short sale situation as they add up the numbers, however if they fall behind in their payments, this could then put them into this category. For those buyers who enter into a contract to purchase such a home, it could be a rude awakening to find out that the deal, not disclosed as a short sale at the outset (because the numbers provided to the agent by the seller showed seller receiving net proceeds) is now turning out to be a short sale. It is anticipated that litigation from buyers based on failure to provide full disclosure on financial issues will increase as the potential for short sales increase. Read article

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