A short sale is a unique real estate investment technique. A short sale is a
transaction in which a lender accepts a discounted payoff on a mortgage to avoid a
foreclosure. This is attractive to a bank when a homeowner in foreclosure
owes more than can be realized through a traditional real estate transaction.
"By giving investors a
superior tool to submit and close short sales empowers them
to help alleviate the current mortgage crisis. Short sales allow lending
institutions to divest their portfolios of assets, rescue property owners from
credit ruin, and allow foreclosure investors to make a profit. It's a
win-win-win
situation."
However, while the short sale can be a lucrative investment technique, it is
not easy. For one thing, the investor and the bank must negotiate a price
that is acceptable to both parties.