Short sales are where the owner puts the property on the market, through a real estate agent, open to a minimum offer set by the lender. When an offer is received, it is presented to the lender who has the option to accept or reject. With today's market any reasonable offer is usually accepted.
It has been found that this kind of sale is an advantage to both the lender and the homeowner. It saves the lender from lengthy legal requirements of a foreclosure as well as possibly having the property sit empty and open to vandalism, which is so common nowadays. For the home owner it is a clean break from the worry of payments that cannot be met and a chance to start over.
Contacting a real estate agent is the first step for a home owner, deciding on going this route, to do. This real estate person will notify other agencies about the property and the situation. The procedure is the same as if it were a regular sale, where prospective buyers come and inspect the property, then make an offer. Usually there is a minimum set by the mortgage holder but this can usually be negotiated.
Banks or other lenders are taking a terrific hit on properties these days. However, when it is obvious that the occupants cannot meet the loan payments some kind of action must be taken. Contrary to public opinion, banks or lenders who loan money on property are just the representatives of investors and they must recover as much money as possible on these properties.
With so many foreclosure properties on the market, their value keeps going down. With the short sale, the lender is able to recoup at least part of their investment, the homeowner is freed of the stress of being unable to make payments and, for the buyer it is an excellent chance to purchase a home or investment. The short sale has turned out to be advantageous for all concerned.
Government programs to stop this bleeding of foreclosure properties has, thus far, not been very successful. The short sale is a quick and efficient way to clear up a problem for both the lender and the homeowner. In many cases, if the buyer qualifies they can obtain a loan to make the purchase.