Property values in most parts of the country have recovered and have even surpassed previous highs in some areas. And as you read here yesterday, the number of completed foreclosures has fallen to lows not seen since 2008. Yet that doesn’t mean there still aren’t pockets that are still in a recoveryReal Estate Negotiation mode. Home values fell so much so quickly that certain property owners still owe more than what the property is currently worth today.

That keeps many who want to sell from doing so because they would have to come to the closing table with several thousand dollars just to satisfy the outstanding mortgage lien. But what lenders have become much better at over recent years is the execution of a short sale, alleviating this road block for sellers and real estate investors alike.

A short sale is a formal agreement between a lender and a borrower where the lender accepts less than the full amount owed on the mortgage and still marks the note as paid. Lenders don’t like short sales but they don’t like foreclosures even more. To the lender, it must be made plain the short sale is the only solution, otherwise the distressed homeowner will indeed join the ranks of the foreclosed. The short sale request must be made in advance and a price agreed upon and many lenders are even asking for a signed sales contract to accompany the request, although that’s not a requirement for most lenders.

The lender will review the homeowner’s financials to verify the current situation coming to the conclusion the borrower cannot pay the mortgage and the property’s value is indeed much less than what is owed. A buyer will make an offer just like any other and now that lenders have fine-tuned their short sale approach, while the closing might take a little longer, it’s certainly not as long as it used to be to get the short sale agreement in place.