What is a short sale

Definition of a Short Sale

A short sale is a real estate transaction where a property is sold for less than the amount owed on the mortgage. This typically occurs when the homeowner is facing financial difficulties and cannot continue making mortgage payments. The lender agrees to accept a reduced payoff to avoid the costs and time associated with foreclosure.

Key Features of a Short Sale

• Seller's Financial Hardship: The homeowner must demonstrate financial distress.

• Lender Approval: The sale must be approved by the mortgage lender.

• Market Value: The property is sold at its current market value, which is often lower than the mortgage balance.

• Potential Impact on Credit: A short sale can negatively affect the seller's credit score, though typically less than a foreclosure.

Process of a Short Sale

1. Homeowner consults with a real estate agent.

2. Homeowner contacts the lender to discuss the possibility of a short sale.

3. The property is listed for sale at a price acceptable to the lender.

4. Offers are received and submitted to the lender for approval.

5. Once approved, the sale is completed, and the lender receives the proceeds.

If you are facing some financial hardships and are having a difficult time making your mortgage payment, give me a call? I can give you an honest assessment of the options that are available to you.