Jeanne M. Reardon

A short sale is one method by which a homeowner can avoid foreclosure. The homeowner, due to economic hardship, can no longer pay their monthly mortgage payment. The primary options for such a homeowner are: (1) discontinue paying the mortgage and ultimately lose the home through a foreclosure proceeding; or (2) seek relief from the debt by negotiating a short sale. A short sale avoids default and has less of a negative affect on the homeowner's credit than a foreclosure.

When a lender agrees to a short sale, it means that they are willing to release their lien against the property for less than the outstanding mortgage amount and allow the sale to occur. The incentive for the lender to agree to a short sale is to avoid foreclosing on the premises, because foreclosure is an expensive and time consuming process.

On average the foreclosure process takes a year to complete. Over this period the lender will have to retain an attorney to pursue the foreclosure action and repossess the property. The process of repossessing the property, overcoming legal hurdles in court, and finding a buyer and selling the property can cost the lender tens of thousands of dollars, especially if the homeowner vigorously defends the foreclosure. The bank can avoid all the time and expense associated with foreclosure by agreeing to a short sale.

The homeowner does not have to be delinquent in their mortgage payments in order to begin the process of negotiating a short sale. Ideally, the owner should retain a real estate lawyer as soon as they anticipate an inability to make mortgage payments. However, most homeowners begin short sale negotiations only after they have missed some payments or foreclosure proceedings have begun.

The bank will continue to seek repossession of the property while the owner is seeking a short sale. Not until the short sale has been successfully negotiated and closed will the foreclosure proceeding be halted.

A short sale is more complicated than the average real estate closing, making it all the more important for you to hire an experienced short sale attorney to negotiate the short sale and act as a buffer between you and the lender. Jeanne M. Reardon is an experienced short sale attorney who will speak to the lender on your behalf.