Stage 3 of 4 · Ways Out Before the Auction
Short Sale
A sale of the home for less than the loan balance, agreed to by the lender in place of foreclosing.
- In plain English
- In a short sale the owner sells on the open market and the lender accepts the proceeds as settlement even though they fall short. Every lienholder has to agree, which is why these take months.
- Example
- A house worth three hundred thousand dollars secures a three hundred and sixty thousand dollar loan, and the lender approves the sale anyway.
- Why it matters
- It usually damages credit less than a foreclosure and gives the seller some control over timing.
- Remember it as
- Sell it short, walk away clean.
Where it lands in the timeline
Stage 3: Ways Out Before the Auction
The auction is the default ending, not the only one, and every exit in this phase narrows a little more each week the calendar keeps turning.