The term "real estate short sale" is being bandied about more and more as of late. Read the newspapers, or turn on the TV and the odds are high that you will come across stories about declining real estate market conditions and the increasing willingness of banks and other financial institutions to consider real estate short sales as an alternative to foreclosure.

In all parts of the country, real estate prices are down and the time it takes to sell properties has risen dramatically. It is no exaggeration to say that some regions are experiencing a virtual market meltdown (the Detroit market is one good example). Declining real estate markets are the primary reason for the rise in short sale real estate opportunities.

So, what is a real estate short sale? A real estate short sale is when a bank agrees to allow a property to be sold for less than the amount owed on it. There are two conditions that must be met before a bank is likely to approve a real estate short sale:

1. Market values are such that the property's sale price cannot cover the outstanding mortgage balance(s).
2. The owners find themselves unable to continue to make mortgage payments on the property.

As an example, suppose a property was purchased five years ago for $217,000 with an adjustable rate mortgage. Let's say that two years after purchasing the property the owners took out an additional $10,000 second mortgage, which means that today the owners owe $227,000 on the property (note that in five years the amount that the mortgages would have been paid down is negligible).

Further assume that the property is in a part of the country where market values have fallen to $215,000 for comparable properties, and that the adjustable mortgage interest rate has recently increased from 7% to 11%. Finally, add the fact that one of the owners has just lost her job and the makings of a real estate short sale situation become apparent.

Rather than go through the expense and time delays that a foreclosure proceeding would require, the bank may decide that allowing a short sale makes more sense in the long run -- better to have a known amount of money now and the property off of the bank's books than an unknown amount of money at some distant point in the future. Of course there are numerous complications to the process that can arise, such as when multiple owners and/or multiple lenders cannot agree to the terms and conditions of a sale, but in a nut-shell that is the gist of a real estate short sale.

While a real estate short sale is an unfortunate and unpleasant experience for an owner forced to go through the process, it's not the end of the world and it's better than having a foreclosure on one's credit report. On the other side of the coin, a real estate short sale can often represent an excellent buying opportunity for the savvy real estate investor.

More info on your stop foreclosure information search:

Get Free Foreclosure Advice and Free Refinance Quotes
Get your free on-line foreclosure refinance quote and free advice from foreclosure mitigation specialist in minutes. Compare real offers from top national subprime and hard money lenders... more...

Short Sale Training - The Biggest Short Sale Mistake
I'm writing to let you know about the #1 way to speed up the Short Sale process that very few Realtors actually know about. Not using this strategy is the Biggest Mistake most Short Sale Realtors make. It may not be what you think, because it's not a "traditional" real estate strategy... I can't ... more...

Short Sales - 3 Key Factors Gurus Never Tell You About How To Do Short Sales
For those of you who are new to the Short Sale arena or new to real estate investment, let's first define what a "short sale" is and what it's SUPPOSED to accomplish. A short sale is the process of negotiating with a Mortgage Lender to convince them to accept less than the Homeowner's mortgage ... more...

Short Sale Questions
The main stream media continues to be rich with stories about the struggling real estate market, here in the Sacramento area as well as across the country. They generally revolve around the increasing number of foreclosures, the mortgage crisis and now some of the government programs that may or ... more...

Short Sale 101
This occurs when the net proceeds from the sale of a home are not enough to cover the sellers' mortgage obligations and closing costs, such as property taxes, transfer taxes, and the real estate practitioner's commission. The seller is unwilling or unable to cover the difference. Some ? although by ... more...