What is a short sale?

A short sale is a real estate transaction in which the owner of a property owes more than the property is worth, but is able to negotiate with the lender to accept the proceeds of the sale in satisfaction of the mortgage debt. A short sale is typically a less costly option than foreclosure for both the lender and the homeowner. In North Carolina, the short sale process can be complex and lengthy. The homeowner must demonstrate financial hardship and show that the short sale will benefit all parties involved. If the homeowner does not have equity in the property, the lender may require that the owner pay a cash contribution to make up the difference. The lender must also approve the buyer’s offer. Throughout the process, all parties must follow certain regulations and transparency. The homeowner must be represented by a real estate attorney at all times. The lender must review all documentation and provide a written response to the offer in a timely manner. The lender must also keep the homeowner informed of the decision and any actions taken. Ultimately, a short sale relieves the owner of the burden of paying a mortgage on a property that has decreased in value. It also protects the lender from a larger financial loss due to foreclosure. Ultimately, it is an option that needs to be carefully weighed before being pursued.

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What is a short sale?

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