A short sale is an alternative to foreclosure. Foreclosure is a legal action taken by a lender against a homeowner, in an effort to take ownership of the property in order to satisfy a debt. If you do not want to keep your home but want to avoid foreclosure, a short sale may be the right option for you.
In a short sale, you would find a buyer for the house and negotiate with the lender in order to sell it for less than it is worth, but still fulfill your obligation to the lender (i.e. the lender is accepting a lower payoff than what is owed).
In a short sale, the lender allows a homeowner to sell his or her property at market value. Although the sale price may be lower than the balance owed on the home, the lender agrees to it because they will have better chance at recovering their money. A lender’s other alternative is foreclosure, which can be both timely and expensive. By agreeing to a short sale, the homeowner will avoid having a foreclosure on their financial record.
Furthermore, after the short sale has gone through, all financial losses will be written off.
Who Should Consider a Short Sale?
A short sale is ideal for people who want to avoid foreclosure without having to file for bankruptcy. A short sale will essentially halt the foreclosure process, preventing the lender from suing the homeowner for the money still owed on the home. |
