Prevent Foreclosure with a Short Sale

A short sale can help a homeowner in foreclosure. When there is no hope that a homeowner can pay his or her mortgage payments, a real estate short sale may be a good solution for the homeowner. You do not have to wait until you are late on your mortgage payments to begin the short sale process. Learn about what is a short sale and consult a Realtor early about the possibility of doing a short sale when you think that you might not be able to keep up with your house payments soon.

Understanding What a Short Sale is

A short sale is a real estate sale in which the proceeds from the sale are smaller than the balance left on a loan secured by the property sold. In a short sale, the bank or mortgage lender agrees to discount a balance of a mortgage because of an economic or financial hardship on the part of the mortgagor. This negotiation is almost always done through the bank’s loss mitigation department.

How to Stop Foreclosure

A short sale is usually done to stop foreclosure. A bank usually will allow a short sale if they think that it will result in less financial loss than foreclosing as there are carrying costs that are associated with a foreclosure. A short sale is usually faster and more cost effective than a foreclosure. In short, a short sale is just a process of negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount. The process does not extinguish the remaining mortgage balance unless the bank expressedly states it in writing.

Learning about Short Sale

There are many books on the subject of short sale. Some books are for homeowners in foreclosure. These books explain to them what a short sale is and how it can help them save their properties from foreclosure. There are also books for investors hoping to take advantage of the foreclosure market. Foreclosed homes are often cheap so new home buyers and new real estate investors can buy them fairly easily. Examples of books on short sale are The Art of the Short Sale, Short sales: An Ethical Approach, Doctor Foreclosure: The Secret to a Successful Short Sale, and Short Sale: A Practical Approach.