What is a Short Sale?

If you or someone you know is facing foreclosure, a short sale may enable you to sell your house if you are upside down, meaning you owe more than your house is currently worth. So, what is a short sale? Well, quite simply, a short sale is where your lender accepts less than what you owe as paid in full.

Why Would My Lender Accept Less Than What I Owe?

Banks are not in the business of being landlords, they are in the lending business. You'll never hear the bank say this, but they DO NOT want your property back. There are so many properties that have gone back to the banks over the past couple of years that it is literally putting them out of business. The sheer volume of non performing mortgages and bank owned properties is limiting the money available for lending to others. Point is, it's in their best interest to accept a short sale if it makes more sense than foreclosure.

Can a Short Sale Help Me?

It is next to impossible to sell your property traditionally if you are upside and owe more than your house is worth. A short sale can enable you to sell your house for less than what is owed so that you are able to compete with the bank owned properties and other pre-foreclosures in your area. A foreclosure will stay with you for the next 7 years while a short sale, which may still negatively affect your credit, will not be as bad as a foreclosure. Remember, life does go on and even though it may sound easier to just walk away, a short sale may allow you to sell your house and walk away debt free while avoiding the foreclosure.