What is a Short Sale? 

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more agreeable to the short sale process.  Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale package approved.

But to be technical, here's a more official definition:

  • A homeowner is 'short' when the amount owed on his/her property is higher than the current market value.
  • A short sale occurs when a negotiation is entered into with the homeowner's mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then 'sold short' of the total value of the mortgage.


For homeowners to qualify for a short sale, they must fall into any or all of the following circumstances:

  • Fiancial Hardship - There is a situation causing you to have trouble affording your mortgage.
  • Monthly Income Shortfall - In other words, "You have more month than money." A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
  • Insolvency - The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
  • With the passage of the Mortgage Forgivness Debt Relief Act of 2007, (H.R. 3648) a taxpayer does not have to pay federal income tax on debt forgiven for a loan secured by a qualified principal residence. This tax break applies to debts discharged from January 1, 2007 to December 31, 2012 (See the Getting Started page to download necessary tax forms).

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. I hold the CDPE® Designation and am ready to identify all possible options and, when possible, assist in the quick execution of a short sale transaction.

Understanding your options now could mean all the difference in the world!

This represents only a summary of one of the solutions available to homeowners facing forclosure. Please call me today for a FREEconfidential evaluation of your individual situation, property value, and other possible solutions.

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RE/MAX Coastal Properties
4444 Mission Blvd. • San Diego, CA 92109
Phone: (858)354-7777 • Fax: (888)283-3344
CA DRE# 01123099