“Is a short sale when a bank takes your property away?”
“Is a short sale when you get forced out of your house?”
A short sale is when the lender, presumably the bank, agrees to accept less than the amount that the seller owes on the property, because there is not enough money coming from the sale of the home to pay off the mortgage. Usually a seller will have to be in default on their mortgage payments , before they will be considered as a candidate for a short sale. They must prove hardship, also, in order to qualify.
The lender will not approve a short sale unless the seller has no equity in the property, and is unable to repay the difference due on the mortgage after the sale. The seller may owe taxes on the debt that is forgiven by the bank, also. The bank may release the borrower from the liability under the note by signing a “deficiency waiver.”
Before considering a short sale, remember to speak with a real estate attorney experienced in short sales, or get a referral to speak with such a lawyer from a real estate agent who is experienced in short sales.