What is a Short Sale?
A short sale is when an owner is selling his property owing more on his loan(s) plus closing costs than the current value of his property. A seller may have enough funds to make up the difficiency (the difference between what is owed, plus costs of sale and the sales price), but if he lacks the funds he would ask his lender(s) to agree to take less than the loan amount owed. In many cases the lender will agree to the sale in order to mitigate their loss. Foreclosure would usually be the lender's other option if the seller cannot make his loan payments, which can end up more costly for the lender(s) than agreeing to a short sale.
Homeowners often try to achieve a short sale in order to circumvent foreclosure. For many, avoiding a foreclosure provides a “more graceful exit” strategy.
Be prepared for a possible wait when making an offer on a pre-foreclosure/short sale home; very few can close in 30 days or less and some may take many months to close.
For further discussion on short sales you may contact Virginia for a confidential consultation.
