A short sale is when a mortgage lender agrees to accept a lower mortgage payment amount than is due to facilitate the sale of the property by a homeowner with financial difficulties. The lender forgives the remaining balance of the loan. A real estate short sale is an offer of a property at a sale price lower than the amount owed on the current owner's mortgage. A short sale is when a homeowner sells their property for less than the amount owed on their mortgage.
In other words, the seller lacks the cash needed to pay off the full mortgage loan. The bank or lender generally accepts a short sale to recover a portion of the mortgage loan owed to them. For a short sale to take place, both the lender and the homeowner must be willing to sell the home to the new buyer at a loss. The homeowner won't make a profit (and won't pay any fees) and the lender will lose money by selling the house for less than the amount owed.
A short sale occurs when a property is sold for less than what is owed on the mortgage with the lender's approval. Learn the advantages and disadvantages of these types of transactions for the seller and the buyer. Often, lenders demand that other loss mitigation options be considered and rejected, depending on the financial industry, to find solutions to manage homeowners' debt, for good reason before considering a short sale. Once you've obtained approval from your lender to make a short sale, it's time to create your short sale proposal and start looking for potential buyers.
If you decide to sell your home for less than what you owe in a normal sale, you'll have to pay all the fees and the amount you would need to pay the mortgage. You should have a good understanding of everything related to buying a property that is listed as a short sale. As any real estate agent will say, a motivated seller is a seller who wants to reach an agreement, so a cheap offer is more likely to be accepted in a short sale than in a traditional home sale negotiation. While the real estate market has slowly recovered since then, short selling is still an option for homeowners struggling to keep up with their mortgage payments.
While you'll want to sell your property as close to market value as possible (and your lender will agree), don't forget what led you to organize a short sale in the first place. Holders of this certification have specialized training in short selling and foreclosures, qualify sellers for short selling, negotiate with lenders, and protect buyers. A short real estate sale is when a homeowner needs to sell their home, but the seller is “short” of the capital needed to pay the mortgage and all charges related to the sale. That opens the field for homebuyers who are more patient for a short sale and who will face less competition for the home.