What is a Short Sale?
Advantages/Disadvantages of a Short Sale to Buyer and Seller
A short sale is when a property sells for less than what is owed to the bank(s). A short sale is not the same as foreclosure. Selling a home through short sale will prevent foreclosure. A homeowner will receive less damage to his/her credit score through a short sale versus a foreclosure. Most lenders do not allow a seller to receive any sort of profit from a short sale. There are other options to getting out from under a negative equity situation, but there are few quick, easy solutions.
From a seller's perspective, a short sale can be emotionally difficult. The obvious reasons are associated with what is typically a time of financial stress for the homeowner. But in addition to this, it can be difficult not knowing how long the process will take. Many sellers that we assist with their short sales are eager to get out from under the house and move onto the next phase of their life.
From a buyer's perspective, a short sale can be a great way to get a good price on a home, but the short sale buying process can be very difficult from the buyer's perspective as well. Most first time buyers will find it difficult to wait what can often be several months to get an answer on their offer. Also, many buyers mistakenly believe that short sale homes always sell for pennies on the dollar, which is rarely the case. If a buyer can be patient and not get emotionally attached to a property, then short sale properties can offer some fantastic opportunities.