There is a lot of confusion surrounding the short sale. The short sale is a way for a homeowner to make a quick sale on their home without the stigma of a foreclosure. It is a financial way of saying that the holder of the loan will accept less for the house than the value of the loan. Usually, a short sale is utilized when the homeowner is already behind on payments. Short sales are becoming very popular.
A short sale cannot be conducted unless both the lender and homeowner agree to the terms. One of the terms that the lender may require is a letter dictating the hardship from the homeowner. They may look at the home-owner’s financial state such as their budget, bank records or any other financially related information.
Once the short sale is approved by the lender, the former homeowner will see the results on their credit record. It is better than a foreclosure mark and shows that the property is released. However, it is not entirely good. It depends on how the lender dictates it to the credit reports.
The short sale is good for buyers in the sense that lenders are willing to accept lower prices for the home. This is a good way for buyers to find an affordable price in the neighborhood of choice. The short sale also means that the lender is willing to close fairly quickly on the home to get it off of their books.
The current real estate market is generating a lot of short sales. For sellers, this means getting out of a heavy financial obligation. For buyers, it means a deal.