Short Sale The Short Version
There are so few approved buyers in the real-estate market these days, but every one of them is looking for a good deal through buying a foreclosure or a short sale. I think everyone understands the foreclosure process, but as short sale signs sprout up like weeds, you may wonder what they're all about. If a lender agrees to accept a mortgage payoff amount less than what is owed on the note in order to create a sale of the property by a financially distressed owner, it's called a short sale. The lender forgives the remaining balance of the loan, with both the lender and seller taking losses. Short sales are a challenge for the buyer, the seller and the lender. The seller can expect, a short sale is likely to damage their credit for 2 years, but not as badly as a foreclosure, up to 7 years. The seller will walk away from their home with no money from the deal, possibly making it difficult for them to find another place to live. The buyer can expect to get the property at a reduced price and will need to go through many challenges and a considerable amount of red tape to make the deal happen. The lender will take a financial loss but perhaps not to the degree as it would have if it had foreclosed on the property.