Short Sale Simplified (an alternative to foreclosure) 

Short sale, it’s becoming a popular word in real estate conversations. But, what exactly is it, and how does a “short sale” differ from a traditional sale?  Here’s the skinny…I’ll keep it brief. 

A short sale is a property sale where the amount owed is larger than the market value of the property. With a traditional sale, the seller of the property is financially responsible for the difference between the sale amount and amount owed. But, with a “short sale”, the bank (or any lender) agrees to take a loss for the amount of the negative difference. 

Not every seller who has a balance greater than market value qualifies.  There are guidelines and regulations that apply to a short sale.

If the seller has the means to pay the difference through other assets such as savings, and/or they have income that allows for payments, they will likely be denied the “short sale” opportunity.  

With an approved short sale, the real estate brokerage fee (commission) is paid by the holder of the mortgage. 

Short sale buyers need patience and must be considered a “strong” buyer. The process can take months. 

Short sales have a moderate impact on credit scores for the seller. Conversely, a foreclosure can have a huge impact on credit scores (100’s of points). 

Short sales are only considered after the property is “listed” for sale and a buyer is secured. 

Short sales can be the financial solution for many property owners who are “upside down” in their property ownership. 

If you believe a “short sale” could be the right solution for anyone you know. I am available to help with consultation, market value reports, and marketing solutions. Please forward this message to anyone who may benefit from it.