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.

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.
• Medical Hardship
  

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. Together, we can identify all possible options and, if necessary, assist you in the quick execution of a short sale transaction.

  A Short Sale is: 

When a homeowner is authorized to sell for less than what is owed on the mortgage.
When the lender authorizes or accepts the sales price as a payoff.
When the seller avoids foreclosure  

Why would a Lender agree to a short sale?

Financially, it's a smaller loss to accept a short sale than it would be to incur the additional expenses of a foreclosure.
Lenders are in the business to lend money not home ownership. The more resources they have tied up on a property the less they have to lend out. 
 

How does a short sale help me?

It helps you avoid an emotionally draining foreclosure process.
Avoiding a foreclosure with help save your credit. A foreclosure could drop your credit score up to 200 points.
Avoid having a foreclosure on your credit report anywhere from 7 to 10 years, which affects your future purchasing power and interest rates.
It could help you avoid a "deficiency judgment" from the lender after the foreclosure as they try to recuperate their losses.

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Short Sale Frequently Asked Questions (FAQ)
I have already received my foreclosure notice, is it too late for a short sale?

The short answer is no, but there are a few variables that can affect the foreclosure timeline.
A qualified Realtor  can help you extend the foreclosure timeline up to 6 months and in many circumstances up to 7 or 8 months.
A sale of a home can be done and approved up to the day of the bank sale or auction of the home.

I haven't missed any mortgage payments; can I still do a short sale?

Typically the lender will not consider a short sale if there have not been any missed payments but can be overcome if we can show a compelling reason why the payments have been made but the payments are not sustainable into the near future.
We would need to show if the payments were made with your credit cards, by borrowing from family members or even if the money came from retirement accounts, as an example. This will not guarantee the lender will accept but there are instances where they have done so.

How do I pay the Realtor commissions, taxes and other expenses associated with a home sale?

The homeowner does not pay any of the expenses associated with the sale of the home, such as commissions and other closing costs. Those expenses are also paid by the lender.

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Important Facts:

You will have to prove and explain personal hardship to the bank in order to process a Short-Sale.
The assistance of a professional realtor is required by all banks in order for them to process the short sale: The property must be publicly for sale (MLS).
Most seller-associated closing costs can be negotiated with the the lender.
A Short Sale can take anywhere from one to six months and always requires lender's approval.