A “short sale” or “short pay” as some people may call it, is just a discount. When talking about foreclosures and real estate, a short sale is used to describe the process of a party trying to discount a lien on the property. Most short sales are done under distressed circumstances to the property owner and are usually taken as a last resort on the lien holder’s part.

The process of doing a short on a loan can be quite tedious at times. It involves a lot of time on the phone with lenders and other parties to negotiate the discount and if there are other liens on the property the process progresses. Although a great technique to lower the price on a property, it usually comes at a cost to the owner as the discount will count as income to them and they are NOT allowed to receive ANY money from the sale.

If you are thinking about trying a short sale I would recommend that you have someone who has done one before (or better yet an attorney – in most cases) assist you in the process.

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