In today’s home market, you have likely heard the term “short sale.” Many people don’t know what a short sale is or how it works. A short sale is generally a last-ditch move on the part of both a homeowner and a lender. It happens when the homeowner needs to sell but is lacking in the equity needed to break even. Equity And Home Selling In simple terms, equity is the difference between what you owe on a home and what the home is worth. Equity is something that is generally built over time, and grows as the homeowner makes payments and the value of the home goes up. But when the market runs into problems such as an economic downturn, home values may drop. This can result in a situation where a homeowner is in fact “upside down”—they owe more than the home is worth. In most cases, the best decision is to ride out the difficult time and wait for home values to rise again, as they generally will do over time. However, there are situations where a homeowner may find it absolutely necessary to sell, even if they can’t get enough to pay off the mortgage. This […]
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