What is a short sale? The Preliminary Basics:
Defaulting on mortgage payments can be a difficult situation. Many people find themselves falling into default, or are already in default, and don’t realize that there are options available before the bank takes the house away.
A short sale is an excellent way to avoid foreclosure and can give the homeowner some extra time and protection, as long as it is done properly. A Short Sale a(also known as a Short Pay) is when the lender agrees they will accept a sales price of fair market value for your property, even though the loan amount(s) are more than what the new sales price. So the lender takes a loss on the property, writes off the difference between what was owed and transfers the deed to the new buyer. The bank, if they believe the offer is for current market value, is most cases, the lender or lenders take less than what is owed on the property.