How Short Sales Work

In the real estate world, short sales were a big part of the news cycle from about 2007 to 2015, and if you know me, you know that they’ve been a big part of my team’s business. In fact, we just completed the biggest short sale we’ve ever handled. 

What is a short sale, though? Today I’ll answer that question for you. 

Simply put, a short sale is a sale that acts as a short payoff to the bank. In other words, the seller lists their property for less than what they owe the bank. 

For example, let’s say someone owns a $500,000 property that’s fallen into disrepair that they need to sell, but they owe $600,000. Traditionally, the seller would be required to bring that $100,000 difference to the table. What we do, though, is go directly to the bank, explain the situation, and make the case why the seller should be relieved of that debt. It sounds like a crazy concept, but it happens all the time. 

The reason a bank would agree to do this is that it mitigates their loss. Going through the normal foreclosure process takes anywhere from six months to two years, and there are a lot of fees involved in this process. By doing a short sale, banks actually make more money. 

There are fewer and fewer people that need to do a short sale these days, but this service is still available. If you or someone you know owes more than what their property is worth, we’d be happy to help them do a short sale, so don’t hesitate to give us a call. 

As always, if you have any other real estate needs, feel free to reach out to us as well. We’d love to help you.