If you’ve been shopping around for a new home, you’ve probably heard the term “short sale” thrown around. This type of sale occurs when a homeowner makes an arrangement with the mortgage lender to avoid having their home foreclosed on. The buyer gets the house at a lower cost, and the seller can reduce the risk of having their credit ruined by a foreclosure.
How does a short sale work? The seller and lender come up with a price that’s lower than what the seller owes. In most cases, this allows the seller to get out of paying the balance of the loan and avoid going through a foreclosure. The lender agrees to accept the lower amount and does not have to worry about taking over the home and finding a new owner, as they would with a foreclosure. They also get at least some of their money back this way. Buyers are able to get good deals on homes through short sales, although this might take longer than a regular home sale.
To learn more about a short sale, click here.