What is a short-sale?

A short sale is the sale of a property where the sales price is less than what is due on the existing loan(s).

Lenders are now dealing with a large number of bad real estate loans and foreclosure is not an automatic answer to the problem. A home in foreclosure is very expensive for the lender, there are months of unpaid payments, foreclosure fees, their holding costs, repair, marketing and other costs associated with a sale.

The short sale of a home helps prevent the costly REO process as an alternative to foreclosure.