What is a short sale?

While the housing market and economy are gradually showing signs of improvement, there are still many people who are behind on their mortgage payments and unsure of how to proceed.  One option is a short sale.

Short sales are when the owners sell the mortgaged property, with the banks approval, knowing that the house will likely sell for less than the outstanding mortgage amount.  Some banks will then write off the difference between the outstanding mortgage amount and the selling price of the home.  However, that is not a guarantee so you should talk with your mortgagor to understand exactly what they will allow and get their approval before listing your house for sale.

If you are facing the possibility of losing your home, talk to your bank and a local real estate agent about the options.  Having a portion of your loan written off through a short sale will hurt your credit much less than going through a foreclosure.

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