What is a short sale?

short sale is a real estate transaction in which a homeowner sells their property for less than the amount owed on the mortgage. Short sales are typically used as a last resort when a homeowner is unable to afford their mortgage payments and foreclosure is imminent.

Why would a homeowner sell their home short?

There are a number of reasons why a homeowner might sell their home short. Some of the most common reasons include:

  • Job loss: Losing a job can make it difficult to Nationalhomegrantfoundation.com afford mortgage payments.
  • Medical bills: Unexpected medical bills can also strain a homeowner’s finances.
  • Divorce: Divorce can lead to financial hardship for both parties, and it can be difficult to sell a home that is jointly owned.
  • Declining property values: If the value of a home has declined, it may be worth less than the amount owed on the mortgage.

How does a short sale work?

To initiate a short sale, the homeowner must contact their lender and explain their situation. The lender will then review the homeowner’s financial information and determine if they are eligible for a short sale. If the lender approves the short sale, they will work with the homeowner and a real estate agent to sell the property for the best possible price.

What are the pros and cons of a short sale?


  • A short sale can help homeowners avoid foreclosure.
  • Short sales typically damage a credit score less than a foreclosure.
  • Homeowners may be able to negotiate with their lender to forgive some or all of the remaining debt after the short sale.


  • Short sales can be complex and time-consuming.
  • Lenders may not approve all short sale requests.
  • Homeowners may be required to pay taxes on the forgiven debt.

Tips for selling your home short

If you are considering selling your home short, here are a few tips:

  • Act quickly. The sooner you contact your lender, the better. Foreclosure proceedings can move quickly, so it’s important to get started on the short sale process as soon as possible.
  • Be honest with your lender. Be honest about your financial situation and explain why you are unable to afford your mortgage payments.
  • Work with a qualified real estate agent. A qualified real estate agent can help you price your home correctly and negotiate with your lender on your behalf.
  • Be patient. Short sales can take several months to complete. Be patient and work with your lender and real estate agent to make the process as smooth as possible.

Selling a home short can be a difficult decision, but it may be the best option for some homeowners. By following these tips, you can increase your chances of a successful short sale.

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