Owning a home can feel empowering. It can provide security, stability, and financial benefits. Sometimes, however, homeowners face significant challenges that make it a less profitable experience. Career changes, finances, the strength of the economy, and the terms of your mortgage can turn home ownership into an economic hardship.
In such cases, a homeowner may choose to use an option called a short sale. A short sale is a type of solution for real estate owners who are experiencing financial distress, though it has significant advantages and drawbacks. This article will discuss what a short sale is, the pros and cons of short selling, and how to contact an experienced Illinois real estate attorney for more details.
What Is a Short Sale?
A short sale is when a homeowner sells real estate for less than what he or she owes on the mortgage. It is sometimes done to avoid foreclosure of the property by the bank. The homeowner uses the money from the short sale to cover some or most of the outstanding debt. For example: suppose you owe $650,000 on a mortgage and you sell the house for $550,000. Your outstanding debt, referred to as a deficiency, would be $100,000.