Short Sale 101: What It is All About

Author : Nancy Sliwa | Published On : 26 Jul 2021

A short sale is a deal the homeowner makes with their mortgage lender to sell the house if they cannot pay their mortgage money on time. The homeowner will have to sell the house for less than it’s worth, but they can skip the foreclosure process this way. 

In some scenarios, homeowners might end up being unable to pay their mortgages in the stipulated period. Even after borrowing, it might end up becoming a headache for money-tight families to pay their mortgages if they face an acute shortage of money.

Thus, the homeowner and the mortgage lender undertake a mutual agreement to go for a short sale. While this process can be devastating to the homeowner, it is easier for them to avoid the lengthy and costly legal process of foreclosure. 

In this article, the process of Short Sale Homes Illinois is detailed below.

What is a Short Sale?

A short sale is a situation in which the homeowner and mortgage lender agrees to sell the house for less than it’s worth. The homeowner might not get a penny out of the deal, but it does allow them to sidestep the foreclosure process. 

It is a way for them to recover the remaining mortgage money without taking the legal route.

Process of Short Sale

The process of Illinois Short Sale Homes & Houses is explained below:

1. Pre-Foreclosure Process

The homeowner has fallen behind or defaulted in mortgage payments. Now they must decide their next course of action- whether they want to do nothing or go for a loss mitigation process. This includes the following options:

• Short sale

• Deed-in-lieu 

• Loan modification

The short sale method is discussed in this article. 

1. The Short Sale Application

Once the homeowner has decided to go for a short sale, there is certain paperwork and procedures they need to complete. This includes completing the application for the short sale to the lender and finding a realtor to aid them during the short sale process. 

2. Negotiation Procedure

Once the application is approved and a sales contract is obtained, the negotiation procedure will begin. The realtor or attorney will take care of this process of dealing. 

3. Closing the Short Sale

When the sale gets approved, the closing is scheduled. The buyer gets a 45-day window to pay the lender money. The homeowner has no role to play here, as the dealing has moved between the mortgage lender and the new home buyer.