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Real property

short sale

A short sale in the real property (real estate) context—also known as a pre-foreclosure sale—is made when a homeowner sells their home for less than the balance due on the mortgage loan after the lender (bank) agrees to accept the lower amount in full satisfaction of the loan balance (a deficiency waiver).

Although the bank may waive its right to recover the balance or deficiency from you after the proceeds of a short sale are applied to your loan balance, a short sale will usually have a negative impact on your credit score—often as much as a foreclosure.

In Idaho, a short sale occurs when a homeowner sells their property for an amount less than what is owed on the mortgage, with the lender's approval. The lender may agree to a deficiency waiver, which means they forfeit the right to pursue the homeowner for the remaining balance owed after the sale proceeds are applied to the mortgage debt. While this can provide relief from the debt obligation, it is important to note that a short sale can still negatively affect the homeowner's credit score, potentially to the same degree as a foreclosure. Idaho state statutes and federal law do not specifically regulate short sales; instead, they are governed by the terms negotiated between the lender and the borrower. Homeowners considering a short sale should consult with an attorney to understand the potential financial and legal implications, including tax consequences and the impact on credit history.

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Real property

short sale

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Idaho State Code

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Real property

short sale

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