What is a Short Sale in Real Estate?

Don’t let the name fool you – a short sale in real estate doesn’t have anything to do with time. Instead, it has to do with “shorting” the lender money owed.

What is a Short Sale?

Somewhere around 5 percent of all homes sold in the U.S. are short sales. Some sellers choose this route when they’re close to foreclosure (that means the lender is going to repossess the home and evict the sellers). A short sale is less damaging to a credit score than a foreclosure is, which allows sellers a better shot at buying another home in the near future.

In a short sale, the bank pays for the real estate commissions and, in many cases, closing costs. Sellers can stay in the home until the deal closes, too, whereas a foreclosure forces the seller to leave and find another place to live.

How Does a Short Sale Work?

Sellers start a short sale just like any other real estate sale. They work with a real estate agent and list the home as a short sale; then, they wait for an offer.

Once the sellers accept an offer, they must get the lender to accept it, as well. The problem is that often, lenders aren’t willing to take a loss – and some lenders would prefer to foreclose on the home. The lender will require a lot of paperwork (including a hardship letter from the seller explaining why he or she wants to use the short sale process).

Then, the lender will probably have the home appraised.

For these reasons, a short sale transaction can take a long time to complete – months, even.

Are You Selling or Buying a Home for Sale in Lake City?

If you’re selling a home in Lake City, we’re the local experts. We know how to market your home aggressively and bring in qualified buyers, and we’d love to help you sell quickly and at the right price.

If you’re moving to Lake City, we can help you find the perfect place to live. Call us at 386-243-0124 to tell us what you want from your home and we will begin searching right away.

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