In today’s economic condition and faltering real estate economy, many homeowners are defaulting on their home resulting in costly foreclosures for both the lenders and the homeowners. Foreclosing on a borrower who cannot afford their payment costs the lenders/banks time and money. A beneficial alternative to this is a short sale.
A short sale is when the lender/bank agrees to discount the mortgage/loan of the home due to some condition or financial hardship of the homeowner. Basically the lender/bank is accepting less than what is owed. For example, if homeowner Jim has a mortgage of $200,000 on his home and he is currently experiencing financial hardship, a short sale can be obtained if done right. The short sale if
accepted by the bank will reduce the loan owed to $150,000 for example. The bank/lender simply reduces the amount owed to them and accepts a lower amount allowing Jim to sell the house quicker. Many homeowners are scared or do not know how to contact their lender to do a short sale. A professional familiar with short sales is invaluable in this process.