Home Selling in Lyons>Question Details

Sweetromangi…, Home Seller in Lyons, IL

What exactly is a short sale ?

Asked by Sweetromangirl, Lyons, IL Tue Feb 2, 2010

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Smurfs aside :>) , a short sale does indeed occur when the mortgage holder lets a homeowner sell a home for less than the full mortgage amount. Generally the home seller must prove that the financial burden of owning the home has become a problem. The bank will want to see pay stubs, tax returns, and other documentation. On some occasions, the mortgage holder will take the proceeds of the short sale as payment in full. However, lenders do sometimes require that all or some of the "deficiency" be repaid by the seller through an unsecured loan. A short sale does damage the home seller's credit score. Obtaining another mortgage loan will probably be out of the question for several years.

Lenders often agree to short sales because they cost the lender less than foreclosing.

Ron Rovtar
Prudential Real Estate of the Rockies
0 votes Thank Flag Link Tue Feb 2, 2010
Hi Sweet,

A short sale is basically when you sell your home for less than what is owed on your mortgage. You are shorting the bank the funds owed to them. With the dramatic drop in real estate prices, banks have been more willing to accomadate such transactions. However, you do need a valid reason for a bank to accept such a transaction, such as loss of income or someother hardship. I hope this helps. Feel free to contact me at anytime for more information.

Have a Great Evening!
0 votes Thank Flag Link Tue Feb 2, 2010
A short sale is when a smurf goes out and buys a new mushroom that is ready to move into. (Thanks handy smurf)

Actually, a short sale is when someone owes more on their house than it is worth. They convinced the bank to take less than is owed on the house if it sells.

Basically it is a cheaper way to out compared to foreclosure for the bank than letting it be foreclosed on. It can take forever for an offer to be accepted. Sometimes, it goes fairly quickly.
0 votes Thank Flag Link Tue Feb 2, 2010
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