I'm sure most of you reading this right now have either heard of a short sale or have had first hand experience with one through someone you know. The reason I say this is because the word "short sale" is becoming a very common term in today's economy.
What is a short sale? A short sale is defined on wikipedia as "a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan"; couldn't have said it better myself. So in simple terms if someone is unable to pay their mortgage due to job loss, relocation, or increased financial burden and the property is worth less than what is owed, a short sale is an alternative to foreclosure. It's not something that can just benefit the borrower, but it can also benefit the bank/lender as well.
The best way to go about starting a short sale or buying a property that is in the approval process for a short sale, is to first consult with an experienced real estate agent that has dealt with these in the past. If you are looking to work through a short sale or purchase a property in the middle of a short sale without an agent, it can be a long, time consuming, and frustrating process that might not even work out in the end. Short sales take persistence, patience, knowledge, and experience.
Please read this article about how short sales are becoming a common practice among banks/lenders thanks to a new rule created by the US Treasury Department. And even better, if a short sale is approved a buyer can receive up to $1,500 to help with relocation expenses and the lender can receive up to $1,000 for approving it. Sounds like a "win-win" to me.
With spring fast approaching, don't hesitate to contact a real estate professional about short sales, the short sale process, and what properties in your area are eligible to be bought/sold this way. Good deals are out there to be had by all.