Why Banks do Short Sales? Short Sale is an option that makes more financial sense to the lender than foreclosure. By doing a short sale, banks can often recover 80-90% of the estimated market value of the property, as opposed to an auction sale that could only bring 50% of the market value or less.

- Short Sale is less damaging both to the lender and the property seller than foreclosure.

- Short Sales are popular in declining markets where home values are now lower than homeowners' outstanding real estate debt obligations and a short sale is the only way to get the property sold and avoid foreclosure. 

- Short Sales require seller's lender and all lien holders approval. Our job is to make sure you get the approvals.

- Your bank could let you do a short sale, and agree that you sell your property to a 3rd party for less than you owe in mortgages, forgiving the balance, if you're in a financial hardship or must relocate.

Related Terms & Definitions.

Short Sale (Pre Foreclosure Sale - Short Sell - Short Pay).
Definition: Short Sale is a Real Estate Sales Transaction where the proceeds of the sale fall short of the property owner's outstanding real estate debt obligations (mortgage loans, real estate taxes, commissions, etc..).

A lender may agree to adjust the amount owed on the mortgage and accept less than a full payment to get the property sold and avoid foreclosure, by selling the property to a third party, forgiving the balance, if the seller is in financial hardship or must relocate, and a short sale is the only way to get the property sold.

Foreclosure.
Definition: Repossession of a real property. A legal process by which the lender forces a sale of a mortgaged property because the borrower has not met the terms of the mortgage.

REO.
Definition: Real Estate Owned. Refers to Bank owned property aquired through foreclosure. If a property is foreclosed upon and does not sell at the sheriff sale (auction), it goes back to the lender and becomes an REO.

BPO.
Definition: Broker Price Opinion