A short sale occurs when a homeowner sells their property for less than the amount they owe on their mortgage. This typically happens when the homeowner is facing financial hardships and is unable to stay current with the mortgage payments – and instead of going through foreclosure, the lender agrees to accept a lower payoff to mitigate their losses. It can be a complex and challenging process, but it does offer benefits for both homeowners and buyers.

For homeowners, a short sale can help avoid the damaging effects of foreclosure on their credit score and financial future. It provides an opportunity to sell the property and settle the debt with the lender, allowing them to move on and start fresh.

At the same time, buyers can often find great deals on properties through short sales, as they are typically priced below market value.

If  you're looking to gain experience as a short sale agent, you must have a deep understanding of the local market to determine an appropriate listing price. You should also have established relationships with lenders, with whom they can effectively communicate and negotiate on behalf of the homeowner.

Lastly, to ensure a seamless process, short sale agents should be able to coordinate with other professionals involved in the transaction, such as attorneys, appraisers, and title companies.

Two main challenges in navigating a short sale are:

• Limited experience -- Many agents are new to the short sales process, a difficulty compounded by the lack of sufficient and experienced staff to process them by many lenders. Even if the agent is experienced, some servicers are under-staffed and not adequately trained, making negotiating more difficult. 
• Multiple lenders -- When more than one lender is involved, the negotiations are much more difficult. Second lien holders, for example, may hold up the transaction to exert the largest possible payment in exchange for releasing their lien, even though in foreclosure, they will get nothing.

According to the National Association of REALTORS® (NAR), agents have also reported difficulties with: unresponsive lenders, lost documents that require multiple submissions, inaccurate or unrealistic home value assessments, and long processing delays, which cause potential buyers to walk away.

To help overcome such challenges, NAR offers free webinars and core courses. Agents may also become specialists in the short sale niche by earning NAR’s Short Sales and Foreclosure Resource Certification.

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This material is meant for general illustration and/or informational purposes only. Although the information has been gathered from sources believed to be reliable, no representation is made as to its accuracy. This material is not intended to be construed as legal, tax or investment advice. You are encouraged to consult your legal, tax or investment professional for specific advice.

About Bobbi Pronin
Bobbi Pronin is an award-winning writer based in Orange County, Calif. A former news editor with more than 30 years of experience in journalism and corporate communications, she has specialized in real estate topics for over a decade.

Bobbi is not an employee of Anywhere Integrated Services or affiliated with its title companies.