Selling Your Home Short Sale & The Short Sale Process
What is a Short Sale?
A short sale is a method of selling your home or investment property at market price with the approval of your lender, which results in loss or short fall to the lender/bank.
An example of a short sale would be selling your home for $100,000 when you owe $180,000 to your lender, which results in an $80,000 short fall to the lender.
Overview: Requirements, PROs and CONs of a Short Sale
- The seller must be deemed to be in a hardship situation by the lender in order to qualify the home as a short sale candidate
- There are no closing fees or commissions charged to the seller on a short sale property
- Average length of time to complete a short sale is 90 days
- Depending on a seller's financial position, a lender may require a seller to make contributions
- Waiting period requirements for getting future loan can be shorter for Short Sale vs Foreclosure on conventional loans (4 years vs 7 years) unless the mortgage loan was discharged in a bankruptcy during a foreclosure (then the waiting period may be the same).
Questions and Answers About Short Sale Transactions