Condo Selling 101

Short Sale

In some cases, condo owners are not able to sell their condo for enough to cover the outstanding mortgage. To avoid foreclosure, you could do a "short sale." This is when your lender agrees to let you sell the property for less than you currently owe on your mortgage. A short sale is preferable to foreclosure, but can be hard to accomplish because your lender must be onboard and there is a lot of red tape to wade through. For that reason, you should always enlist the assistance of a professional agent and real estate attorney experienced in short sales, in addition to a capable accountant.

The way a short sale works is the lender eats the loss from the outstanding loan amount and the borrower is excused from the debt. Not all lenders agree to do short sales, but many are amenable to the idea because they do not want to foreclose on the property.

Short sales are generally priced below market value to get a quick response from buyers. Once an offer is made, the lender will review it. They are responsible for approving or countering the offer and have the final word on all transactions. Even though it is called a "short sale," the entire process can be lengthy. But it is a favorable alternative to foreclosure.