What is a Short Sale?

In real estate, a short sale is a sale of property in which the amount raised by the sale is less than the amount owed to the lender of the property. For example, if you owned a house and could not continue to pay the mortgage on it, the bank may allow a short sale of the house, knowing that they will lose money on the sale.

Why does the bank opt for a short sale?

A bank authorizes a short sale to avoid an even more costly foreclosure. Typically, the bank authorizes a short sale because it believes that the amount of money lost via short sale will be less than the amount lost in the event of a foreclosure.

Most lenders have certain set conditions that must be met for a borrower to qualify for a short sale.

Short sales are especially common today in the wake of the foreclosure crisis experienced in 2008 and 2009. Banks are now interested in short sales as a way of avoiding taking an even bigger loss that would occur in a widespread series of foreclosures.

Contact Us

If you are considering applying for a short sale or would like more information about them, contact the Maryland mortgage modification lawyers of Chaifetz & Coyle, P.C. at 443-546-4608.