About Short Sales

What is a Short Sale?

A short sale differs from a foreclosure, which is when the seller’s lender has taken title of the home and is selling it directly.  A short sale happens when the lender is “shorted” on what is owed on the mortgage note, meaning the lender will accept less than the total amount that is due.  Homeowners often try to avoid a foreclosure by selling via a short sale.

Who Qualifies for a Short Sale?

Not all homeowners will qualify for a short sale.  There are some key factors that will determine if you can sell your home as a short sale.

  • The Market Value has Dropped
  • Your Mortgage is in or near Default
  • You Have a Qualified Hardship

What are the Consequences of a Short Sale?

While a short sale will not show up on your credit report, the loan status will, often reported as Paid in Full for Less than Agreed.  A short sale will also affect your credit ratings, although not as significant as a foreclosure.  If you had missed payments or late payments prior to the short sale, those will also have a negative effect on your credit.

It should also be noted that short sales are complicated and time consuming. They take quite a bit of work between all interested parties and sometimes you may have one of those parties drop out or make requests for changes that doom the sale.

You may also face consequences with your taxes since cancelled debt may be considered taxable by the IRS.


If you owe more than your home is currently worth or are facing foreclosure, a “Short Sale” may be an option for you.  Contact us today to find out what your options are and if you are eligible to “short sale” your home.