What is Short sale? Good question.
Short sale is when the sale proceeds do not cover the mortgage amount and the costs associated with the sale of the property.

So, if your mortgage payout is $300,000 and the buyer is paying you $280,000,it is a short sale. The difference in this sale is that the mortgage holder will have to be consulted before the deal becomes firm and binding. The lender will either have to take the loss of
$20,000 or arrange for a line of credit for the sellers.

It is rare to see a short sale, but down South it is a very common process. In the USA the short sales are coming on the market faster then the foreclosures and if they don’t sell fast enough they will become foreclosures. However, here in Canada short sales are very few  since our Real Estate markets are more stable and our mortgage structure allows for the homeowners to renegotiate and restructure their mortgage rates and their terms every 5 years.

Have a story you would like to share, or a question about short sales? Leave a comment below, I would love to read them.

Tibor