A short sale is the sale of a property in which a seller is experiencing a financial hardship and where the anticipated contract price to purchase the property may not be suffieient to pay the balance owed on the mortgage or lein and closing costs. Because of this an offer to purchase must be made contingent upon the seller's lender being in agreement to a discounted payoff.
The benefit of a short sale from a sellers perspective is, if their house does not sell and the lender proceeds to foreclose, this action would have have a negative impact on their credit report. In a short sale a lender may release the seller from further legal action and prevent more negative reporting to the credit bureau.
The benefit of a short sale to a lender is that the lender may accept an offer on a short sale property to prevent foreclosure from happening. The lender may not be interested in owning an abandoned house and incurring the costs involved in the foreclosure process.
In a short sale situation a buyer could possibly get more house for their money. It is worth some consideration. If you have more questions or seek additional information on short sales feel free to speak with your legal council for clarification.
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