SHORT SALE INFO

Short sale definition

A short sale happens when a lender agrees to take less than the total amount owed. In this way, your home can be sold and the lender gets most of their money back without foreclosing.  

The obvious question from most people is “Why would my lender agree to a short sale?”

Lenders are in business to make money. When a borrower gets behind on their mortgage payments, the lender has the right to foreclose to pay off the debt. However, in the current real estate market, many properties cannot be sold for the amount owed against them. It is possible to persuade lenders to take less than the full amount owed if the lender believes that it will make more money though a short sale than through a foreclosure.

Does everyone win in a short sale?

Generally yes. The lender is relatively happy, because they have resolved the bad loan and kept down their loss. The buyer is happy, because they bought the property for less than someone else paid for it. The seller is happy, because they saved their credit and kept a foreclosure off of their record.

Eligibility defined

Your specific circumstances determine whether or not your lender will do a short sale. These circumstances are usually related to the current real estate market and your financial situation. A short sale is typically used to prevent a foreclosure, but the decision to accept a short sale is based on the banks financial analysis of your specific transaction.