Definition
A short sale occurs when the bank or lender who holds your mortgage is willing to
sell the property for less than what is owed.
It is a transaction between you, a buyer and your
lender (the bank). When you fall behind on mortgage payments, and your property’s
value is lower than the amount owed on the loan, a short sale is one option that
can be used to stop foreclosure. The process is the same as a traditional home sale,
however, the price has to be negotiated with the lender and they must approve the
sale price of the house when an offer is submitted.
This allows you to avoid foreclosure, and begin rebuilding credit much more quickly
than with a foreclosure.