What short sale is:

• When the owner cannot make the monthly payment and a short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship
• It is pre foreclosure situation.
• The owner’s hardship could be divorce, job loss, sickness, bankruptcy or combination the financial problems all together.
• The owner’s credit will hurt badly, but it is better than a foreclosure.
• The short sale is a long process. It could take 2 – 3 months easily. The closing rate of short sale is improving from 12% January 2008 to mid-year about 40%.
• The short sale is avoidable if the lender offers a loan modification to the owner.

What short sale isn’t:

• Not all the short sale is a bargain. It really depends. Buyers beware. Again location, location, location. Hire an experienced real estate agent to help you buy home.
• It isn’t a way for the owner walk away the loan free without trace. This owner’s credit score will be damaged.

Why the short sale happens:

• It all begins with the owner cannot make the monthly payment.
• The owner pays option ARMS there is no equity build up.
• The owner purchased with 100% financing (another no equity).
• The owner refinanced 100% or above 100% without equity.
• Owner’s economic situation is upside down and the owner missed payment.
• The home was bought over price and it is devalued.
• The owner cannot refinance anymore.