What Are Short Sale Real Estate Transactions?
A short sale real estate transaction takes place when a homeowner's mortgage company allows a property to sell for less than what the homeowner owes on the property.
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Significance
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Short sale real estate transactions eliminate the need for a homeowner to damage his credit by going through the foreclosure process.
Requirements
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According to eforeclosuremagazine.com, the property must appraise for less than the amount owed on the mortgage, and the homeowner must have missed several mortgage payments. A home buyer must demonstrate long term financial hardship and not possess any assets that could pay off the difference of the short sale.
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Homeowner Benefits
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The bank forgives the remaining loan balance a homeowner owes when a short sale is finalized.
Lender Benefits
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According to the National Association of Realtors, mortgage companies allow short sale real estate transactions to avoid the expensive foreclosure process and to collect as much of the unpaid mortgage balance as possible.
Considerations
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Short sale real estate transactions often take longer to process than traditional selling transactions.
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