When homeowners fall behind on their mortgage payments, they face the harsh reality of losing their home.
A short sale is when a home owner owes more on a mortgage than their property is worth. The homeowner then asks the lender to accept less than what is owned on the house. AKA - the lender lists the home for less than its value. A lender will do this to
release an existing mortgage that was not being paid. Think of it as the seller is “short” the money needed to fully repay the mortgage lender. Therefore the lender chooses to sell it to another buyer who will hopefully make all mortgage payments on the
For a buyer, this means they can likely buy the house at reduced price. If the home is listed as short sale it is known that bank or lender want to get this house off the market as soon as possible. Therefore they will be more likely to accept a low-ball
deal. Be warned, the property could require a lot of maintenance and upkeep costs, so be sure to have it thoroughly inspected before you make your purchase.
For a seller, selling their home short sale will mean they won’t get any profit from the sale of the house. All profits will go to the bank or mortgage lender. But, selling your home short sale is better for your credit score than a foreclosure. Keeping
a good credit score is crucial to any future home purchases. Lastly, not being able to keep up with your mortgage payments is emotionally draining for you and everyone involved. It is the biggest financial event of a person’s life if you can’t afford
the payments, it’s better to get it sold and move on with your life.