What is a short sale in a foreclosure?

A short sale in a foreclosure is a way for a borrower to avoid foreclosure by selling a property for less than the amount owed on the mortgage. In a short sale, the borrower can arrange for their lender to forgive the remaining balance on the loan and accept the proceeds of the sale as payment in full. In Washington, when a lender decides to pursue foreclosure, they must first provide the borrower with written notice, detailing the right to redeem the property and the amount of money that must be paid to avoid foreclosure. This is known as the Right of Redemption. If the borrower is unable to pay the amount specified in the Right of Redemption, they may try to do a short sale. In this scenario, the borrower will work with their lender to agree on a sale price that is lower than the amount owed on the loan. The lender will then forgive the remaining amount on the loan in exchange for the proceeds from the sale. Short sales can provide borrowers with a way to avoid the lengthy, costly, and sometimes embarrassing process of foreclosure. However, a short sale will still impact the borrower’s credit score and may affect their ability to borrow in the future. Therefore, before deciding to pursue a short sale, borrowers should consider the long-term impacts of the decision.

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What is a short sale in a foreclosure?

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