What is a Short Sale?
A short sale occurs when a homeowner owes more on their mortgage than they can sell their house for. For example, a homeowner has a loan for $200,000 and the homes in the neighborhood are selling for $125,000. If the homeowner has a true hardship, they can go to their lender and see if they are a candidate for a short sale. The reason for the term short sale is because the homeowner is asking the lender to sell the home for an amount that is short of the full loan payoff amount. Some first time buyers think a short sale refers to the timeframe for the approval. This is not the case. I have seen short sales take anywhere from 60 days up to 200+ days, for an approval. If the buyer is patient, they can get a great home that is maintained, by the homeowner, until closing at a great price.