What's A Short Sale? | Short Sale or Forclosure or ? | Boise Real Estate Forums

A short sale is a transaction that occurs when a homeowner owes more in his home that it is worth.  For instance:

• Mr. Jones owns a home on 123 River Street
• His loan is $250,000
• Market value is $200,000
• Mr. Jones is $50,000 upside down

In order for him to sell his home and pay off all of the debt to the bank, he must do one of a couple things:

1. Bring $50,000 cash to closing.
2. Sell other assets (if any) to bring $50,000 cash to closing
3. Ask the bank for a BIG favor and have them lower their loan amount and forgive the $50,000

Number 3 is the basic definition of a short sale: Ask the bank for a BIG favor and have them lower the loan amount on a home and release the lien so the home can be sold.

If you have further questions about short sales,  please ask.  Thanks!

Here are some related short sale links:

• The Best Short Sale advice ever!
• Short Sale: Common Questions
• Short sales still causing headaches

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