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What does it mean "short sale to the bank"

Some people we know are doing a "short sale to the bank" to get rid of their house. Does anyone know what this means?
What about just a "short sale"?

Answer Question
 
LovemyQ

Asked by LovemyQ at 2:17 PM on Aug. 23, 2009 in Money & Work

Level 6 (119 Credits)
Answers (4)
  • It means that the house is for sale for less than is owed.
    LuvMyBoyzz

    Answer by LuvMyBoyzz at 2:25 PM on Aug. 23, 2009

  • They are selling the house quickly to avoid foreclosure (hence the "short sale). Everything has to be approved through the bank, and it does sell for less than is owed. The bank is typically willing to do this because if the house forecloses it's unlikely (especially right now) for them to get what's owed plus all their costs for foreclosing on it from an auction or regular sale. I used to work in real estate and watched some people do some AMAZING short sales. When DH and I finally buy, this is what we'll probably look for.
    Jafra_mommy

    Answer by Jafra_mommy at 2:27 PM on Aug. 23, 2009

  • so does the house belong to the bank or the people who almost foreclosed on it?
    LovemyQ

    Answer by LovemyQ at 3:23 PM on Aug. 23, 2009

  • It still belongs to the people since it hasn't foreclosed yet. HOWEVER, in order for a short sale to work and clear the previous owner of the debt, the bank has to approve the sale.
    Jafra_mommy

    Answer by Jafra_mommy at 5:05 PM on Aug. 23, 2009

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