What is a Short Sale?
Anytime the proceeds of a property sale is less than (short) of the outstanding loans on a property it is considered a "Short Sale".
What does this mean to a Seller?
As a Seller, you must either 1) Contribute additional funds to escrow to pay off all out standing loans, or 2) negotiate with the holders of all outstanding loans to take less than owed.
With the recent change in the real estate market, many people find themselves in the unfortunate situation due to some event outside their control where they cannot continue making their loan payments and they can't sell because they currently owe more than the property is worth. Most people are afraid to face this situation and let their home fall into default (Foreclosure). A Foreclosure is one of the worse items to have on one's Credit Report. It can affect your financial health for many years.
If you have not received a Notice of Default, it may be possible with a competent Real Estate professional to negotiate a "Short Sale" with the lenders and avoid Foreclosure. If you are in this situation, contact Ron immediately. He may be able to help.
What does a Short Sale mean to Buyers?
A short Sale may be one of the best opportunities to buy property below market. It's somewhat a fallacy, the idea of buying property at a foreclosure auction for pennies on the dollar. The time to buy is before a notice of default has been delivered.