What is a Short Sale ?
In simple terms, a short sale is transaction in which the bank(s) accepts a discount on their mortgage to allow a sale, and thus avoid foreclosure or bankruptcy. For example: A homeowner, who is facing foreclosure, has an existing first mortgage of $500,000. The market value of the home is $350,000. The Mortgage Bank agrees to wipe out $150,000 in mortgage debt, and accepts the offer for $350,000 and the home is sold. In actual practice, a Short Sale is the most complex of all Residential transactions, so make sure you work with seasoned professionals.