What is a Short Sale?

According to Real Estate Wiki (www.realestatewiki.com) a Short Sale is a legal, lender-approved solution assisting financially strapped homeowners to get out from under their mortgage commitment quickly. A Short Sale can be accomplished by negotiating with your bank or lending institution to accept a purchase price for your property to a third party buyer for less than what you currently owe on your mortgage balance.

The real property short sale is not a questionable practice in a softening market, in fact it may have become a necessity. The homeowner wins by getting out of a difficult financial situation through a clean transaction and a salvaged credit score. The property does not go into foreclosure, thus helping home owners minimize impact to their credit rating. The lender wins by avoiding costly foreclosure proceedings or re-taking ownership of the property until it sells; referred to as REO or Real Estate Owned.  The buyer wins by getting a nice property at a good market value.

If you are considering a Short Sale, your first call should be to your financial and/or legal adviser or real estate professional. Also visit Real Estate Wiki for thousands of pages of free online information, definitions and FAQ's about real estate, home buying and selling, home ownership and renting.