Thread: What is a short sale?

A short seller will make money if the estate goes down in price, while a long position makes money when the estate goes up.... sale of estate or securities or commodity futures not owned by the seller who hopes to buy them back later at a lower price.. i hope you get it... what i try to say

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower.

In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Neither side is "doing the other a favor;" a short sale is simply the most economical solution to a problem.

The seller is selling the property for less than they owe on the debit (mortgage).

From a Realtor perspective, they are more complicated than traditional sales , but it is now a very large fact of life that if as an agent, work with short sales or find a new line of work! lol

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage loan on their property, but the lender decides that selling the property at a moderate loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure.This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.


Granted, the agents may take a hit on the commission because the lender will insist on a fee reduction, but the bottom line is the agents and their brokers get paid for selling the property.


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Actually me as well having a confusion with regard to short sell.. It makes a lot of sense for me to drop by on this thread, Thanks guys.