A short sale in real estate terms is when a borrower sells their mortgage for an under appreciated value because the home is worth less than what is owed on the mortgage. In this event, the lender agrees to allow the home to be sold for less than the amount owed on the debt. But like a loan modification, a homeowner must prove that they have gone through a hardship that has gotten them to the point that they are at with the short sale.
Like almost every real estate transaction, a short sale will require the seller to submit all of their financial information to the lender so they may determine if they are eligible for a short sale. Eligibility is a key importance with this topic, as the bank is more than likely enduring a huge loss. If the bank determines the seller not to be eligible, or they cannot demonstrate a financial hardship, this can prevent you from obtaining the property.
Click Here to Read: How to Buy a “Short Sale” House...
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