What is a short sale?

1. Listing the Property: The homeowner lists the property for sale with a real estate agent. The listing price is usually determined based on the market value and the amount owed on the mortgage.
2. Offer and Negotiation: When a buyer expresses interest and makes an offer, it is submitted to the lender for approval. The lender reviews the offer and negotiates terms with the buyer and homeowner.
3. Lender Approval: Illinois law requires mortgage holders to respond within 90 days to any qualified buyer's written request for short sale approval. The lender can either approve, deny, or counter the offer.
4. Acceptance and Closing: If the lender approves the offer, the sale proceeds to closing. The homeowner transfers the property to the buyer, and the lender forgives the remaining debt or negotiates a repayment plan.
5. Release of Lien: After the closing, the lender releases the lien on the property, and the short sale process is completed.

Understanding the short sale process is vital for both homeowners and potential buyers in Illinois. It provides an alternative for homeowners facing financial distress and allows buyers to acquire properties at potentially reduced prices.