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What is a short sale?

A short sale is a situation where a home owner sells the home for less than the mortgage he owes the lender.  Sometimes the seller is forgiven the difference and other times the lender and seller work out a plan for the seller to pay back the difference.  You should be aware that the government considers the difference taxable income.

What are some advantages of short selling a home?

A short sale costs the lender less than a foreclosure and is easier on the credit rating of the seller.  Once the seller has recovered and is ready to apply for another mortgage they may qualify quicker than if they had a forclosure in their history.

What are some disadvatages of a short sale?

Short sales are complex transactions.  Because they require a third party approval they can take a long time even months to complete.

Many real estate agents are unfamilar with the short sale process.  Lenders may be short staffed and inexperienced in short sales.