Short Sale: when an owner sells a home for less than the balance of the loan amount on it. In other words, the owner cannot pay off the loan when the home is sold.
When a homeowner is no longer able to make the payments on the loan for his/her home and therefore sells it, but what they net from the sale of the home is not enough to pay off that loan. This situation is called a Short Sale, and because the price the home sells for does not cover the amount still owed, the lender can approve or disapprove the sale. In other words the lender gets to decide how much money it is going to lose as a result of the sale. A Short Sale can take a long time to get from contract signing to settlement, sometimes many months, and both purchasers and sellers need to be patient. After the sale, the lender may still seek recovery of the balance of the loan from the now former owner. In any event, the former owner’s credit record will be affected adversely. What does this have to do with a home buyer? Although a short sale will require patience and a little daring, the short sale price is likely to be LOW and a good deal for the home buyer. Contact me for more information.