What is a Short Sale? A short sale is the process by which a homeowner can sell a house for less money than actually owed on the mortgage(s). There are alternatives to bankruptcy or foreclosure proceedings for homeowners/borrowers who can no longer afford to keep mortgage payments current. One of those options is called a "short sale." Sometimes, to avoid going through the costs of foreclosure, a lender will approve a short sale by allowing a homeowner to sell (allowing a buyer to purchase) the home for less than the mortgage balance while the home is in pre-foreclosure stage.
Sample steps of a short sale:
• Seller signs a listing agreement with a real estate agent subject to selling as a short sale with third-party approval.
•The owner, or if the owner has an agent, finds a buyer who makes an offer for less than the amount of the mortgage.
• Seller accepts the buyer's purchase offer subject to the lender’s approval.
• Seller's lender accepts the buyer's purchase offer.
• Transaction closes when the buyer delivers the funds, the lender releases the lien and the seller delivers the deed.
Banks take several factors into consideration when determining if it will allow for a short sale to occur. Contact us if you have any question regarding the short sale process.