A short sale basically means that the property is being sold at an amount short of what is owed to the lender. This is a common occurence in today's housing market where homes are now worth much less than what was paid for them only a few short years ago. We find many instances where homeowners purchased their properties with little or no money down, and they determine that it does not make sense to continue to pay their mortgage and taxes anymore. Hence, they put their house on the market at less than what they owe, because the house is worth less.

There is a credit impact on the homeowner when the house is sold at less than what is owed. The lender is taking the primary dollar loss, and since they are not getting their total payback, they report the situation to the credit reporting agencies. However, if a homeowner lets a house go into foreclosure, the credit situation is more severe.

Summing up the short sale process, it actually winds up being a benefit to both a buyer and seller. From the seller's side, they get out of a difficult financial strain situation, and a few years later (perhaps 3 to 5) they will be in a position to purchase another house at a reasonable price (providing they have a required down payment). From the buyer's side, they can purchase a house now at a very reasonable price, unlike at the inflated prices of a few years back. In fact they could be purchasing a home now at less than current market value. And consider the lender, in most cases they are accepting any reasonable offer from list price on a home offered as a short sale, since they do not want to go through the foreclosure process and wind up owning the home. Generally, they would get even less for the home after it is foreclosed and they incur additonal expenses along the way.

Please contact me if you require any additonal information regarding short sales. I have experience representing buyers and sellers in short sale transactions.

Also, for additional information, please visit PhoenixRising.com