What is a Short Sale?
Short sales are when a lender accepts less than the amount owed as full payment of the mortgage balance because there is not enough equity to sell the home and pay all the costs. Most lenders will negotiate a short sale, however, they prefer to work with a Realtor and generally require the home to be listed for sale through the local Multiple Listing Service.
According to financial experts, the affect of a short sale on a seller’s credit report is much less damaging than that of a foreclosure, possibly saving as much as 100 points to their FICO Credit Score and allowing them to reenter the home buying market much sooner.
Short sales require dedication on the part of the Homeowner as well as the Realtor as there are required forms and steps to be followed in the process, however, if you are in a situation where you can no longer make your payments, a short sale may allow you to stay in your home longer and recover quicker than walking away and accepting foreclosure.