Short Sale Option

A short sale is a sale of real estate in which the sale proceeds fall short of the balance owed on the property’s mortgage. It usually occurs when a borrower cannot the mortgage payments on their property, but the lender decides that selling the property at a loss is better than pressing the borrower. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and possible harsher credit report outcomes for the borrower. This arrangement does not necessarily release the borrower from the obligation to pay the remaining balance of the loan (known as the deficiency).