What is a Short Sale?

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders are doing a record number of short sales - some more easily than others. BUT BE PREPARED for a long wait on these - up to 6 months on some. NOTE: You do NOT have to be behind on your mortgage to qualify for a short sale. 

But to be technical, here's a more official definition:

  • A homeowner is 'short' when the amount owed on his/her property is higher than current market value.
  • A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.

For homeowners to qualify for a short sale, they must fall into all of the following circumstances:

  • Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
  • Monthly Income Shortfall – In other words: "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
  • Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

There are no costs to the homeowner for a short sale . Real estate commissions are paid by the lender at closing once the negotiations and sale are completed.

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. Together, we can identify all possible options that are right for you and your family.

Contact me today--right away if you have been served.
For more on short sales and our short sale program, click here.

This site, Richard H. Zwick, Zwick Realty Group & Sand Dollar Realty are not providing legal or tax advice. The information provided is for educational and informational purposes only. It is recommended that sellers considering a short sale should consult an independent legal and tax adviser for more information.

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