What Are the Advantages of a Short Sale?

Short sales allow borrowers to sell their home for less than what is owed.

A homeowner facing foreclosure may turn to a short sale to dispose of the property. Entering into a short sale agreement with a mortgage lender buys you time and may protect you from having a foreclosure on your credit report.

Definition

A short sale is an agreement between the homeowner and the mortgage company that allows the borrower to sell a distressed property for less than what is owed. Although the lender takes a loss in a short sale, it may be better to accept less than what is owed instead of having to foreclose on the property.

Seller

If you sell your property through a short sale, you may not have to move out of your home until the close of escrow. According to Short Sale Advantage, selling a home through the short sale process may have a less negative affect on your credit rating than allowing it to foreclose. In addition, you may not have to make mortgage payments while the home is for sale.

Buyer

Purchasing a short sale can be beneficial for buyers. Because the home may be sold for less than what it is worth, a buyer is able to purchase it below market value. As a result, buyers will be able to get more house for the amount of money that they spend.

References

• Short Sale Advantage: Frequently Asked Questions
• The Parsons Group: Short Sales--Buyer and Seller Advantage