Times are still tough. Unemployment remains high, the markets are improving but at a snail’s pace, and people are still losing their homes in record numbers. If you own a home, and you are facing a foreclosure, you may want to consider a different emergency exit- a short sale.
A short sale is when a seller (usually facing a foreclosure) arranges with their lender to accept a price that is less than what is owed on the property. The benefit to the seller is that they can avoid foreclosure, which is far more damaging to their credit (a short sale may still affect your credit). The benefit to the lender is that they can sell the house quickly, and they do not have to go through the foreclose process. It is costly for a lender to foreclose on a property; they have to pay taxes on the house while it’s listed, hire a real estate agent for the transaction, clean or maintain the property, etc. And lastly, the obvious benefit to the buyer is that they might be able to purchase a home for far less than what it’s worth.
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