What is a Short Sale?
August 30, 2009 | Uncategorized
A short sale is a real estate sale where the homeowners have defaulted on their mortgage and are behind on their payments and the lender has agreed to allow the sale of the home at a discount for less than the mortgage balance.
The purpose of a short sale is to prevent a home foreclosure. Often a lender will allow the short sale if they believe that it will result in a smaller financial loss than foreclosing on the home as there are expenses and carrying costs associated with a foreclosure.
The benefits to the homeowners include avoidance of a foreclosure on their credit report and partial control over the monetary deficiency. A short sale is typically faster and less expensive for the lender than a foreclosure.
