What is a Short Sale?
In the real estate business, a short sale is the sale of a home where the proceeds from the sale are lower than the balance owed on the property’s loan. If an owner attempts to sell a property under circumstances such as these, they would have to pay the lender cash out of pocket at the close of escrow in order to finalize the sale. There are not many home owners that are anxious to do this and decide to instead let their home go into foreclosure. A short sale usually happens when a borrower cannot pay the mortgage on the property and wants to sell the home, but the lender decides that selling the property at a medium loss to the amount owed is a better option than foreclosure. Both parties agree to the short sale process, as foreclosure includes significant fees for the bank and worse credit for the home owner in the years to come.