Short sales are becoming increasingly common in today’s Real Estate market due to falling selling prices in combination with a large number of homes that were financed using a low money down or a no money down mortgage. So what is a short sale? A short sale is when a home is priced below what the sellers owe on their mortgage. The lender agrees to accept less than what is owed on the property and typically negotiating is done directly with the bank. The banks are willing to take less than what they are owed because often the sellers are financial distress and have not been making their payments regularly.

 

The term “short” in short sales is in no relation to the length of time it can take to close a short sale. Since the banks are involved in the negotiation process and are weighing in on the decision making the entire process is slowed down considerably.   A buyer interested in purchasing a short sale needs to go into the process with a lot of patience, knowing it is likely to take a long time. With a bit of patience a buyer can benefit from the reduced sale price that a short sale offers.