There are a range of real estate transaction types in Pennsylvania. Whether you are buying or selling, it helps to become familiar with the different options. One that is becoming more popular is a short sale. As explained by bigger Pockets, a short sale is when the home is sold for less than the amount that is owed to the bank. If you are the seller, you may make an agreement with the bank to settle your account for the full sales price, meaning you would not have to pay the remaining balance on your mortgage. This does not always happen, though. You may be liable for the remaining balance depending on what the agreement you make with the bank says.
The bank must approve a short sale for you to be able to engage in this type of transaction. Banks may agree if you have been struggling to make your mortgage payments. It is preferable to sell for slightly less than the money owed than for the bank to have to deal with a foreclosure situation, which can be time consuming and usually ends with a large financial loss for the bank. A short sale benefits you and them.
You must meet certain criteria to be eligible for a short sale. You may not be approved if the bank does not think you meet all the criteria. This includes being behind on your payments and struggling financially. You may have to provide proof of financial troubles, especially if you have not yet fallen behind on your payments.