What is a Short Sale?
When a property is sold for less that the amount owned to the lender, the property is sold short of the full price. This is a "short sale, a sale of a real estate property where the sale amount does not cover the amount owned to the lender.
A short sale usually results when the owner of a property can't or won't continue to pay the mortgage payments and is forced to sell the property or the lender will foreclose on the property.
Short sales are usually complicated transactions because the lender must approve the sale at less than the original loan. Multiple parties must approve the sale of the asset at a loss. The parties involved include the lender, secondary lenders, investors and the owner. Some short sales never happen because the different parties can't agree on the sale price. Usually the property will then be foreclosed.
A short sale is a preferable solution for both the lender and the owner. For the owner, the short sale is a way out of the situation that makes a smaller impact on his credit report. For the bank, a short sale usually results in a smaller loss than a foreclosure.
Buying a property through a short sale.
Short sale properties are marketed in similar ways as regular properties. You can purchase short sale properties through your neighborhood REALTOR. For example, you can find short sale properties in the Miami area at the Live Realty WEB site.
Short sale transaction often take many weeks if not months but properties can be purchased at or below a fair market price. Most lenders nowadays will try very hard to sell the properties at fair market price. However, the properties are often heavily discounted if a buyer is not quickly found as the lenders will usually lower the list price until a buyer is found. Unless you are very lucky, don't expect to get a premium property at a fire sale price.
