What is a Short Sale?


What is a short sale?


A short sale is what happens when you sell your home for less then you owe on your loans.


If you do not have the money to pay the difference you will have to ask the bank to take less money then you owe them to complete the sale.



 Short Sale vs Foreclosure?  


Short Sale  – Eligible for a Fannie Mae insured loan in 2 years

Foreclosure- Eligible for a Fannie Mae insured loan in 5 to 7 years


Short Sale – Effects credit 50 to 100 points, late payments will show on credit.

Foreclosure – Effects credit for 3 to 7 years and lowers credit score 200 to 300 points. Remains on credit for 10 years.



The Short Sale Process


Home MUST be listed for sale

All financial documents (tax returns, paystubs, bankstatements etc) must be in order

A hardship must exist – hardship letter and any documented proof

You MUST have an offer at market value from a qualified buyer


A short sale is similar to a normal home sale with the exception that the bank also has to approve the sale.  Bank approval can take a few weeks to 6 months.

Unless you have an FHA loan banks are not offering a PRE APPROVED short sale at this time.  This means that in order for the bank to consider the short sale you

must first have an offer from someone to buy your home.  When the agent submits your offer to the bank they will also submit all your financial information as well as

your hardship letter.  Any incomplete information will lengthen the process!!!



What is a hardship?


Loss of income – Job loss or cut in pay

Business Failure

Death of a spouse

Severe Illness

Inheritance – You inherited a property and can not afford the mortgage



Mandatory Job Relocation

Medical Bills

Military Service

Mortgage Adjustment




Investment properties are also eligible for a short sale! 


For more information on short sales or for a free market analysis of your home value as well as current housing trends in your neighborhood feel free to give me a call.


Give me a call if you have any questions.

Brian Frank



Information obtained from sources other than Broker that are deemed accurate, but have not been verified by Broker. Information is subject to change. All interested Persons should independently verify accuracy of the above information. Individual effects may vary, therefore obtaining the advise of legal counsel is recommended