Time and time again I start talking to one of my clients and tell them about this new listing or how this one is a short sale listing. Then I watch their faces look at me somewhat confused as if they should know what exactly a short sale is but aren’t entirely sure. There are a lot of common misconceptions about short sales so I thought I would clear it up for you here. The definition of a short sale is “the sell of a home in which proceeds from selling the property will fall short of the balance of debts secured by liens against the property and the property owner cannot afford to repay the liens’ full amount. In a short sale the lien holders agree to release the liens on the real estate and accept less than the amount owed on the debt. This does not necessarily release the seller of the debt but might in some cases. This is used as an alternative to a foreclosure because it helps prevent a negative credit issue.
What does this mean to you as a buyer? Usually when you see a short sale listed you can bet on a great price for the home. These sales don’t come without warning as you will want to check the home and have a home inspector go through to make sure your “good deal” isn’t going to cost you in the long run.