I’ve been seeing a lot of ads for short sale websites lately. Then, after going back to my old stomping grounds and reading Yahoo Finance, I saw, “What is a short sale?” was the top question on Yahoo Answers.
So what is a short sale?
A short sale occurs when a mortgage company agrees to accept a mortgage payoff amount that is less than the mortgage balance. When a mortgage holder falls behind on payments, or is going to fall behind on payments and is unable to sell their house for enough money to payoff the existing mortgages, then a short sale may be an option that would allow the homeowner and bank to avoid a lengthy foreclosure process. However, not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose.
If you are looking to buy a short sale property, it would be wise to consult both a real estate attorney, and an accountant for legal and tax issues.