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Short Sale

What is short sale ?

A short sale is  when the lender allows borrowers, that are behind on their mortgage payments, to sell their home for less than they owe on the property.
Reasons why one may consider a short sale a better option than a foreclosure...

A short sale can offer the seller peace of mind. They can get out from under their mortgage obligation without going through the forclosure process and severely damaged credit.
Short sales are not exactly risk-free when it comes to the seller's credit, and they will not necessarily eliminate the financial implications when homeowners are unable to pay for a home that they purchased. But a short sale will open the door to solutions for homeowners that can allow them to avoid legal action and the lengthy and stressful foreclosure process.
Short sales can leave homeowners in a much more positive position, lessen their financial burden and salvage their credit to a degree. A short sale can provide "light at the end of the tunnel" to homeowners and offer them a platform from which to start rebuilding financially

 A short sale can protect the seller's credit.
From a lender's perspective, it's better to recover a portion of a mortgage loan than to absorb a total loss. Therefore, in lieu of a foreclosure, banks will often settle for a short sale. This allows both the lender and the homeowner to end up in a better position.
A short sale can prevent a foreclosure.
 A foreclosure can adversely affects the homeowner in a number of ways. This also has a negative effect on the lender and the housing market in general. But, this  can save you a lot of money.
When a homeowner is unable to afford payments, the foreclosure could eventually lead to a financial situation where bankruptcy, with its significant credit implications for the borrower and costs for the lenders, is the most plausible option. Likewise, a short sale can drastically reduce the amount a bank may be looking to recoup from the homeowner. The lender no longer has to foreclose, file suit, evict occupants, repossess and market the property. So the lender can actually benefit from such short sale transactions as well.

Short sales can benefit the housing market.

Waves of foreclosures can be damaging to the economy on a number of levels. Short sales can help resuscitate a neighborhood by making it easier for buyers to get into homes at affordable prices.  A number of short sales as opposed to foreclosed properties can reduce the number of excess homes for sale in a neighborhood, in turn reducing the number of unkempt, vacant houses. 

A short sale gives homeowners more control.

Once the legal gears start turning on a foreclosure, the stressful process begins for the homeowner. Intimidating correspondence arrives in the mail from the lender's legal team without relent. This can be overwhelming for the homeowner and after this drags on for a while, the homeowner can be really motivated to remove themselves from that situation.
In a short sale, there are still negotiations, meetings and paperwork for the homeowner to deal with. But this benefits the seller, as the process plays out more like a traditional sale, without the stressful process of litigation, judgement, eviction and repossession associated with foreclosure proceedings. Short sales really can be a win for all parties involved.
All traditional closing costs, including Realtor fees are typically paid for by your lender in a short sale! So it better to use a Realtor in this transaction. Call me if you have any questions.

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