Author: Manny Kagan

A short sale is a sale of real estate in which the proceeds from the selling of the property will fall short of the balance of the debts. When values of the real estate properties dropped for less than the loan amount, many borrowers tried to modify their mortgages while still living in the property. Those who did not succeed and/or wanted to move out could sell their homes and condos by finding buyers who would purchase their property for less after the real estate agents negotiated with the lenders to accept a sales price of equal or less than the loan amount in order to avoid foreclosure. Short Sales were very popular for a while. Now, when property values started to recoup, the picture has changed. At the same time, lenders (or the government controlled secondary markets) are changing guidelines. Buyers who had short sales will have to wait longer (for foreclosures–7 years). 

To read their guidelines, click here.