Short Sale

What is a Short Sale?

• When a homeowner is authorized to sell for less than what is owed on the mortgage. The lender authorizes and accepts the sales price as a payoff.  The seller avoids foreclosure and many times they can also avoid a judgment. 
• The seller won't get any money at closing, but they will avoid the emotional toll a foreclosure can cause. The negotiations include a favorable wording for the forgiven debt on the mortgage that can help the recovery of the homeowner.

Why would a lender agree to lose money?

• Financially, it's a smaller loss to accept a short sale than it would be to incur the additional expenses of a foreclosure.  Lenders are in the business to lend money not own a home. The more resources they have tied up on a property the less they have to lend out. 

How does a short sale help me?

• It helps you avoid an emotionally draining foreclosure process. 
• It helps you avoid having a foreclosure on your credit report anywhere from 7 to 10 years, which affects your future purchasing power and interest rates. 
• It could help you avoid a "deficiency judgment" from the lender as they try to recuperate their loses from the short sale.