Redemption sum is the total remaining amount the mortgaged real estate needs to be paid by the seller (the borrower). Without paying the redemption sum, the real estate cannot be transferred to a new buyer.
The redemption sum shortfall usually appears to below-market-value real estate where the seller is selling below the property acquisition cost. This can happen in an economic crisis environment or failed speculation or many other reasons.
Real estate negotiators need to make sure the seller has the ability to pay off the differential sum between the redemption sum and the sell price. Some sellers may claim they can borrow a loan to pay off the differential sum but the real estate negotiator need to assess if that is realistic. Short of that, the transaction will most likely be a waste of time.
