Simply put, a short sale is a method some Pennsylvania homeowners use to sell a house that has too much debt associated with it. Completing a short sale would not help you keep your home, but it could avoid some of the long-term financial penalties associated with foreclosure and help you get back on your feet more quickly.
While this process might seem simple to you at first, the reality is that it is often time-consuming and complex. There are typically delays and paperwork associated with several factors:
- Valuation of your home
- Assesment of buyers' offers
- Approval by your bank or lender
To backtrack, the term "short sale" itself comes from the fact that you would be selling your home short of the amount you owe. The Consumer Financial Protection Bureau calls it a type of loss mitigation, and an alternative to foreclosure.
There are many reasons the financial organization to which you owe money might accept such a seemingly one-sided deal. Lenders could approve such a short sale if the amount you owe is higher than the fair market value of the home, for example. Additionally, some mortgage companies may prefer the relatively quick transfer of funds associated with a short sale in place of the delayed receipt of funds from a foreclosure.
It is important to work with someone knowledgeable from the beginning of your short sale process. For example, you should take into account the extent to which your asking price corresponds to the mortgage holder's minimum required short sale price. Every sale depends on the property, the lender and various other factors. As such, please do not think of this as legal advice. It is meant only to educate.