What is a Short Sale?

A Short Sale is when the Lender (bank) agrees to accept less of what is owned on the property. For example if you have a mortgage of $400,000 on your home and the current market price is only $300,000, the bank will end up with the loss of $100,000 if they approve the Short Sale.

Now why would the bank will do a Short Sale and lose money? The answer is simple. The banks are in the business of lending money and making interest on those loans, not in the business of owning houses. If the bank does not approve the short sale, they will have to foreclose the property and try to sell it as a Real Estate Owned by Bank, which will bring them a lot less money than they could receive from a Short Sale. That is why banks are very motivated to do a Short Sale instead.

Why would the seller want to do a Short Sale? The reasons simply are:

• To be able to buy a new home as soon as 24 months from the close of a Short Sale (a Foreclosure will stay on the homeowner's record for 5-7 years);
• To be able to preserve the homeowner's credit score (a Short Sale has a lot less impact on the credit score than a Foreclosure);
• To avoid the Foreclosure;
• To have the opportunity to start all over again.

Ihor Pochay
REALTOR / SHORT SALE SPECIALIST
Tarbell, Realtors
Off: (909) 629-6186 ext. 339
Fax: (909) 629-6710
ihorpochay@hotmail.com
http://www.myrealtorihor.com/