A short sale in real estate is a transaction in which an investor sells property at below market value with the intent to recoup the loss he suffered as a result of foreclosing. This can often be accomplished by a short sale attorney who works under the supervision of a real estate agent or an experienced real estate professional. If you are considering selling your home or business, read this article to learn about what is a short sale in real estate.

what is a short sale in real estate

Short sales have been used as a means of foreclosure relief for some time. When an investor realizes that he will lose money when he tries to sell the property at a value higher than what he paid for it, he will agree to a short sale instead. A short sale occurs when the net proceeds for selling the property exceeds the outstanding debts owed on the mortgage. If all mortgage holders agree to take less than what is owed, a short sale can be negotiated. An investor who agrees to a short sale will pay the mortgage holder for the difference between the value of his property and the outstanding balance owed.

A short sale can work for both investors who plan to buy and for investors who are looking to purchase. If the investor agrees to pay more than the balance owed, the bank will typically agree to purchase the property at a below market value because it would not make any sense to have the buyer pay the entire balance. In this scenario, the bank will use a short sale to make its decision. In the case of a buyer, the investor has saved his money by purchasing at a below market price.

Another option for a short sale in real estate is for the lender to offer a reduced amount to the mortgagor. A lender does not always agree to offer such a reduced amount because they will want to recoup their money through the proceeds of the short sale. In order to do this, they may require the borrower to pay off a larger amount of principal on the loan. A lender may also require a borrower to offer to pay more than what the borrower originally owed on a house in order to facilitate the deal.

An investor who is involved in a short sale will receive the rights to buy the house in person, but the lender will not accept bids over the telephone. Prior to agreeing to this arrangement, the investor must meet with the seller personally in order to see what the value of the house is, as well as discuss what other terms will be offered. In some cases, the seller may agree to set a time limit on how long it will take for the investor to get the house from one point to another. After all of these details are agreed upon, the contract is signed and the deed is transferred.

As you can see, short sales can be a great way to avoid foreclosures and a great way to save money in the process. The key is in finding an experienced real estate professional who can negotiate and work with the mortgage holder to find a fair value to set the price of the home in your situation.