Short Sale



A short sale is selling property for less than the outstanding loan obligations on the property. By short selling, the homeowner can avoid foreclosure. For a homeowner to be approved for a short sale, the owner needs to show the lender that he or she is facing  financial hardship, and the housing market must have gone down so much that the home is no longer worth the remaining balance on the mortgage or mortgages. The short sale allows the homeowner to sell their property for the current market value. There will still be a negative entry on the credit report, but it will not be as bad as having a foreclosure on your record. 



Before applying for a short sale, it is best to have all the required documents ready for the lender. The lender will need tax returns for the last two years, bank statements, pay stubs for the previous month, and documentation of the homeowner’s hardship. If the documents are too old by the time the lender reviews the documents, the lender will likely request updated bank statements and pay stubs. If the homeowner submits a completed package of required short sale paperwork, the short sale could take roughly six to eight weeks from start to finish. There is no prescribed schedule for a short sale, and the time it takes to complete varies depending on the lender and the situation. 


  • Get your documents together to submit the short sale package to your lender. Remember to include evidence that you are unable to continue making your mortgage payments and have no assets available to pay the mortgage payments that are in arrears.
  • List your home with a real estate agent. If you do not have a real estate agent, often an attorney specializing in short sales can assist you with that as many have a valid real estate license. 
  • Your agent will have to determine how many liens have been placed against the property for sale. All lienholders will have to agree to the short sale.
  • The lender and all lienholders will have to agree on the offers once you begin receiving offers on your home. Whatever amount the property sells for will have to be accepted by the lender and all lienholders as full and final payment of the loan.
  • Provide the lender and lienholders a signed sales contract between the buyer and seller. 
  • Obtain a waiver from the lender of their right to pursue the homeowner for the remaining balance of the loan.
  • After receiving approval from the lenders and all lienholders, the homeowner or the agent will work through the sale process to complete the real estate transaction and hand the property over to the new homeowner. 
  • Speak with your lender or have your agent speak with the lender to determine a sale or closing date. If the lender has started the foreclosure process, the sale will need to happen quickly. 


A short sale is not an easy process, so a law firm with experience in short sales is necessary to help guide you through the process successfully. Debt Rescue Law has helped many people with foreclosure, short sale, bankruptcy, debt settlement, and loan modification. Contact us for a FREE consultation today at (833) 707-1234.

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