Perhaps as you are looking for a new Illinois home to purchase, you have come across something called a short sale. A short sale, as defined by Freddie Mac, is a real estate transaction where the seller is selling the home for less than he or she owes to the lender. Obviously, this is an issue for the lender who will be getting less than they are owed. However, the lender does have to approve the sale.
In most cases, a short sale takes place because the owner is not able to pay their mortgage. It is an alternative to foreclosure, which is beneficial to the seller and to the lender. In addition, it is good for you because, as the buyer, you are able to get a better price for the home and save some money.
You should be aware, though, that you will be dealing with the lender and not the seller when it comes to negotiations. The lender is not likely to cover closing costs or inspection fees like a seller might. Additionally, a short sale can take longer to close.
It is also important to be aware of listings that say third-party review required. This means the seller has not yet checked with his or her lender for approval. This could slow the process down and bring up issues with the transaction. It could even lead to a higher selling price because the lender must approve the price. This information is only intended to educate and should not be interpreted as legal advice.