If you have your home listed as a Chester County short sale, it is important that you understand deficiency balances and how they work. Basically, when a home is listed as a Chester Country short sale, the lender is agreeing to allow the home to be sold short of the debts that are owed. The deficiency balance is the amount of money that remains after the home has sold. For example, if a home carries a debt of $250,000 and is sold at a price of $180,000, the deficiency balance would be $80,000.
That begs the question of who is responsible for the remaining balance. Many people who list their home as a Chester County short sale assume that once the home is sold they are free and clear of the debt. What they don’t realize is that a lender does have the right to sue for that remaining balance.
There are ways that you can prevent a lender from pursuing deficiency litigation with a Chester County short sale. One of the first things that you can do is have your agent or real estate attorney put language in your Chester Country short sale agreement that prevents lenders from pursuing deficiency balances. When you get your letter of approval from the bank make sure that you read and understand everything in the contract. Language that suggests that the lender may pursue deficiency balances can be an expensive prospect for any seller trying to dig themselves out of financial hardship.
The HAFA program is also a good program when listing your house as a Chester County short sale. Not only can you prevent the lender from pursuing deficiency, but the program also includes up to $3000 of relocation assistance to those who qualify.
Understanding the potential right for a lender to pursue deficiency on a Chester County short sale is important. Before you sign any approval agreements make sure that you are aware of all the rights the lender is assuming after that sale.