What is a Short Sale?

 

 

Video Summary

A short sale occurs when the buyer of a property gets behind on payments and, rather than enter the foreclosure process, he attempts to sell the property for less than the amount owed. "Short" refers to the difference between the sale price and the amount owed on the mortgage(s). Many properties are being sold as short sales now because of the recent dip in home values. MLS listings usually indicate when a property is a short sale. The lender must agree to the sale price of the property and agree to negotiate with the original buyer as to whether the debt will be given or there will still be a debt. The process can take a very long time to negotiate a sale price and terms that the lender, the borrower, and the new buyer can agree on.