What do you understand by short sale?
In short sale the lending institute usually banks or other mortgage lenders agree that due to economy crunch on the business of the mortgagor, the institute would discount a loan amount required on the property of the seller. The property is sold for an amount less than the outstanding balance of the loan. The householder then turns the spoils to the bank. However not all lenders subscribe to this agreement, because foreclosure of such property could be worth the strain. A short sale is done to prevent foreclosure.

Merits of short sale :
1. To the seller :
He avoids the agony of seeing his property foreclosed without having any call to stop it
He saves himself the emotional stress of foreclosure.
He reserves the decision of choosing who he want to dispose the property to.
he’s relieved of paying the remaining balance on the loan [you must ascertain in writing if the lender is indeed forgiving the deficiency and writing it off]
he may have saved his folks from eviction because you’ll be leaving the house eagerly.
His credit report isn’t supposed to be spoiled by the sale as much as it would in foreclosure.

2. To the purchaser :
the buyer benefitted by buying a property at a reduction.
he can also be buying the property with a clean title.
He does not need to force the seller out as the case may be in some repo’ed properties.

three. To the lender :
The bank’s advantage is that he has avoided a long and boring process of joining in foreclosure. He’s got his cash back at the percentage he knows will benefit him the most

Demerits of short sales :
1Mortgagor can infrequently in the future be sued for the deficiency between the amount owed and the amount paid. The agreement should be well concluded with a clause that the deficiency has been written off by the bank.
2 Short sale is not intended to have an affect on your credit history negatively as foreclosure does, if it is well handled. The seller should ask the lender in the agreement the way the short sales would not affect his credit history. The bank will figure out how this may be reported to the credit bureaus.
3 looking for short sale is a boring task, however it can be highly beneficially to the purchaser, if he succeeds
For you to be accepted for short sale with the lender, you must be willing to send the following document.

Letter of permission : this is to give the bank the legal right to converse with any estate broker you select.

initial net sheet : this involves the detailed statement that list all price of sales, delinquent loan balances, excellent payments, and real estate commission. This sheet can be prepared by a lawyer.
Other requirements
explanation of revenue and Assets
Copies of bank records
Comparative Market analysis
evidence of earnings and Assets
After exhaustive review from the lender you could be granted the legal right to a short sale.

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Short sale buying
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