What is a Short Sale?

A real estate “Short Sale” is where a bank (the mortgage lender) allows a homeowner to sell their home for less than what is owed on their mortgage, and the bank accepts that amount as full payoff and forgives the difference.

A bank may grant a short sale under the following conditions: the seller has a hardship which will prevent them from making their mortgage payments, and the seller owes more on the mortgage than the home is worth which makes it impossible for them to simply sell it and payoff the mortgage with the proceeds.

The bank needs to be convinced to do this by providing them proper documentation which is commonly called a short sale package. A real estate broker that is experienced in the short sale process will work with you to put this package together.

Short Sales are really a Win-Win-Win. The bank avoids having to go through the long, expensive foreclosure process, the homeowner gets to move on with their life and save what’s left of their credit, and the new buyers typically get a home that’s in “Move -In” condition at a substantial discount.