What is a Short Sale?
A residential short sale is a real estate transaction in which a homeowner sells their property for less than the outstanding balance on their mortgage loan. The purpose of a short sale is to avoid foreclosure and satisfy the debt owed to the lender.
The process typically involves the following steps:
- The homeowner contacts their lender to request approval for a short sale.
- The homeowner hires a real estate agent to list the property for sale.
- The real estate agent markets the property and finds a buyer.
- The buyer submits an offer to purchase the property, which is subject to approval by the homeowner's lender.
- The homeowner's lender reviews the offer and decides whether to accept or reject it.
- If the offer is accepted, the sale is completed, and the homeowner's debt to the lender is satisfied.
Short sales can be a viable option for homeowners who are struggling to make their mortgage payments and facing the possibility of foreclosure. A residential short sale can be complicated and requires the cooperation of the homeowner, the lender, and the buyer. It may also involve negotiations between the parties to agree on the terms of the sale. Still, it is essential to consult with a real estate professional and a financial advisor to understand the risks and benefits of the process entirely.