What is a short sale?

A short sale is a type of real estate transaction in which an owner of a residential property in New Mexico sells the property for less than the outstanding mortgage amount owed by the owner. The proceeds of the sale are used to pay off the outstanding mortgage, and any difference between the proceeds and the mortgage amount is typically forgiven by the lender. Short sales can be beneficial for homeowners who find themselves in a financial bind and who cannot afford to pay off their mortgage amounts. Short sales can also benefit lenders by avoiding a foreclosure, which can be an expensive process. When a homeowner applies for a short sale, the lender must approve the sale amount. As part of the approval process, the homeowner must provide documentation showing their financial hardship and the lender must agree to accept the sale amount as payment in full. Once the lender approves the sale amount, the homeowner can then work with a real estate agent to find a buyer for the property. After the short sale process is complete, the homeowner will no longer have a mortgage payment for the property that was sold, but they may be responsible for any outstanding debt remaining after the sale. Additionally, short sales are reported to credit bureaus, which can have a negative effect on the homeowner’s credit rating. It is important to research all aspects of any real estate transaction, and consult with an attorney for advice if needed, before proceeding with a short sale in New Mexico.

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What is a short sale?

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