Short Sale 101
We will begin with the basic short sale terminology that applies to the Fredericksburg real estate market.
What is a Short Sale?
In a Short Sale, a lender agrees to allow a homeowner facing financial hardship sell a home for less than the mortgage owed. A Short Sale is an attractive alternative to foreclosure, typically not pursued until after other efforts to keep the owner in the home have been exhausted. There are potential tax consequences that should be discussed with a tax professional.
Why is a Short Sale better than foreclosure?
Typically, a Short Sale is less damaging to the borrower’s credit. The former owner can qualify for a mortgage backed by Fannie Mae or Freddie Mac to buy another home in as few as two years – far sooner than if there had been a foreclosure. Short Sales also help protect other property values in the community by keeping the home out of potential disrepair.
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