What is a short sale?

A short sale is a situation in which a home seller owes more money on their home than they’ll be able to get after selling the home and paying the expenses related to the sale. Typically a buyer will write an offer on the home and the sellers will negotiate out the terms and add that the offer is “subject to approval by their lender”. The seller’s lender will then review the offer and may order an appraisal on the property to make sure the price being offered by the buyers is the market value of the property.

It can be a lengthy process to get lender approval on a short sale. The time it takes may be influenced by whether the lender is local and can make decisions more quickly, or is a large out of state lender that may take weeks or months to make a decision.