Well, a short sale does NOT mean the process of buying a home will take a shorter time. It is NOT a transaction that is shorter on paperwork. And of course it does NOT refer to a home that is more suited for short people.
So what is a short sale?
A short sale is when the home sells for less than what the homeowners owe on the home. The mortgage company agrees to accept less money than what is owed for the property, but this does not necessarily release the homeowners from having to repay this deficiency of loans. You have to check with your mortgage company to see what their policy is about repayment of the deficiency.
In other words in a short sale, the mortgage company agrees that the money received from the sale of the home is “short” of what is owed on the house.
Why would a home owner want to sell their home in a short sale scenario?
If you can no longer make your mortgage payments and you seem to be headed towards a foreclosure, a short sale may be for you. Your credit is less adversely affected by a short sale than a foreclosure. You can also avoid eviction that goes along with a foreclosure.
Bank of America also states that you may use a short sale if you need to sell your home that is currently worth less than the amount you owe on it.
Want to learn more about short sales?
Give an experienced short sales realtor, such as myself, a call to find out more about short sales.