What is a Short Sale?

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.

But to be technical, here's a more official definition:

• A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.

Do I need to have a major hardship to do a short sale?

This is another common misconception. At the Smith Realty Group, we have done many short sales for borrowers with absolutely no financial hardship to speak of. There are many reasons that lenders will agree to a short sale aside from a financial hardship. To find out about your particular situation, call our office. It is very, very rare for one of our short sales to be denied due to a lack of hardship.