What is a Short Sale?


short sale is the sale of real estate in which the net proceeds from selling the property will fall short of the debts secured by liens against the property. In this case, if all lien holders agree to accept less than the amount owed on the debt, a sale of the property can be accomplished.

Why sell as a Short Sale?

  • Avoid the foreclosure stigma – Homeowners will always have to disclose that they had a foreclosure on any mortgage application and (many job applications) that they submit in the future. This can have an adverse affect on their future mortgage rates. Foreclosure is asked about specifically in credit inquiries. There is no seven-year time limit on this item.
  • Protect credit score – Credit scores will be lowered by 300-plus points (per loan) by foreclosure. The impact of a short sale—about half that much.
  • Improve eligibility for a government insured loan – The homeowner will be ineligible for a government insured loan for 5-7 years (only two years in a short sale). A foreclosure is the one credit report item that is almost impossible to have repaired.
  • Avoid a deficiency judgment – Lenders can seek a deficiency judgment against the homeowner and collect any amount they do not recover at sale.
  • Protect employment prospects – Many employers run credit checks on prospective employees. Foreclosure is one of the top items that will put a potential new hire, or even current employment, in jeopardy.
These are the top reasons, but there are more. Our expert short sale specialist agent can give a full picture of the options.

“I’ll just let the bank take it”

This is a common mistake homeowners make. They don’t realize that when the bank takes the home, they are still liable for all the liens against the property. 

Many times, our short sale specialists can negotiate with the lien holders to work towards eliminating a deficiency judgement against you. 

Don’t believe everything you read about how long short sales takes and how few get finalized. Short sale timelines, while still longer than normal, are shrinking as lenders get their paperwork act together. As pros in the market, we are closing 80 to 90 percent of the short sales we represent. We know where to find buyers, and how to negotiate the offer effectively with lenders and get the deal closed—so you can move on with life and recover.