A short sale is when the bank agrees to accept an offer to purchase on a propepty less than what is owed. In a short sale situation lenders usually take abot an 18% loss vs. a foreclosure wher they end up taking a 30-40% loss depending upon the condition of the property.
With a short sale the borrower(s) are behind in payments and do not qualify for a loan modification. All offers in a short sale are contingent on bank approval. Once an offer is submitted to the lender, it can be a lengthy process for reviewal depending upon if there is mortgage insurance invlovled. So time is of the essence if you need to short sale your home. Lenders are trying to be more pro-active to increase their number of short sales and reduce their foreclosures. It's less costly for the bank to do a short sale and in most cases it's easier for the borrower to recover ftom a short sale than a foreclosure.
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