The Short Sale

A short sale is the sale of a home in which the amount owed to the lender(s) is more than the amount that the home can be sold for. Instead of the home owner having to bring in money to complete the sale, the sale is completed through negotiations with the existing lender(s) and the lender(s) agree to accept less than the full amount owed to satisfy the debt and allow it to be paid off “short.”

 A short sale is a real estate transaction that requires an approval from the lender. It’s not some complicated legal process that requires paying an attorney.

 Short sales are different than a regular real estate transaction because once you stop making your mortgage payments, the clock starts ticking and you’ll get one shot to do a successful short sale. If your agent is inexperienced at short sales, makes mistakes, gives up, slacks off, or simply doesn’t know how to negotiate with the banks, you’ll wind up being foreclosed on.

 A foreclosure will devastate your credit. Your credit score can be lowered by as much as 300 – 400 points and you’ll be hounded day and night by your lender. Even worse, you’ll have difficulty getting credit cards, auto loans or even renting a home or an apartment for the next 7 years.

 Your lender does not want to foreclose on your home.

It’s true. They would much rather have you stay in your home and continue making your payments, or have you sell it and get it off their books, even if it requires them taking a financial loss. Remember, banks are in the lending business, not the real estate business, which brings me to my next point:

It makes absolutely zero difference whether your lender is Indymac, Wells Fargo, Chase, Countrywide / Bank of America, Downey Savings, CITI, Chevy Chase, Washington Mutual, Wachovia, World Savings, First Franklin, Flagstar, GMAC, Greenpoint, Homecomings, HSBC, Irwin, Novastar, Option One, Aurora, Deutsche Bank…

I've worked with them all and they all work the same – if you submit a sensible offer and a clean package and have the systems and resources in place to consistently and continuously follow up on the file, it will get accepted and your home will be sold “short.” You’ll pay nothing. You’ll owe nothing. You’ll avoid having a foreclosure on your credit report and you’ll survive to fight another day!