A short sale is a real estate transaction in which the lender agrees to accept less than the mortgage amount owed by the current homeowner. It occurs when a homeowner sells their home for less than they owe on the mortgage, with the lender of the original mortgage receiving all of the proceeds of the sale. The lender must approve the short sale before it happens, and the process can take as long as a year. Short sales usually indicate a homeowner in financial distress, a real estate market in the doldrums, or both.
Short sales can be beneficial for both the seller and the lender, as the financial consequences of a short sale may be less severe than a foreclosure. For a buyer, a short sale can yield a good deal on a property, but it generally takes a certain amount of fortitude and patience, plus a lot of luck. Short sale properties are sold "as is," which means that the buyer wont be able to negotiate a lower purchase price if there are problems with the property.
Here are some key points to keep in mind about short sales:
- A short sale is an offer of a property at an asking price that is less than the amount due on the current owners mortgage.
- The lender must agree to the short sale, as the home sells for less than the seller owes, so the lender wont get all their money back.
- Short sales usually indicate a homeowner in financial distress, a real estate market in the doldrums, or both.
- Short sales can be beneficial for both the seller and the lender, as the financial consequences of a short sale may be less severe than a foreclosure.
- Short sale properties are sold "as is," which means that the buyer wont be able to negotiate a lower purchase price if there are problems with the property.
