Top 3 Things You Need to Know About Doing a Short Sale

Top 3 Things You Need to Know About Doing a Short Sale
If you’re falling behind on your mortgage or facing foreclosure, a short sale can be a smart way to avoid foreclosure and protect your credit. Here are the three most important things to understand before you start:
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  Lender Approval Is the Key Step
A short sale happens when your lender agrees to accept less than the total amount owed on your mortgage.
• You’ll need to prove financial hardship — such as job loss, medical bills, or reduced income.
• The lender will review your hardship letter, income, assets, and a property valuation before making a decision.
• If there’s more than one lien (like a second loan or HOA lien), every lienholder must approve the sale.
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  Pricing and Negotiation Drive the Outcome
Getting the price right is critical — it needs to attract buyers and meet the lender’s expectations.
• The lender wants fair market value, not a discount deal.
• Agents should provide comparables, repair estimates, and net sheets to justify the offer price.
• Expect negotiations — lenders might counter, request higher offers, or ask sellers to contribute toward the deficiency.
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  Timelines and Expectations Matter
Short sales take time — often 60 to 120 days or longer.
• Buyers must be patient, since approval isn’t guaranteed.
• Some sellers may qualify for relocation assistance or cash-for-keys programs.
• Always confirm whether the remaining debt is forgiven or settled, as it can affect your credit and taxes.
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  Bottom Line
A short sale is a powerful tool to avoid foreclosure, but it’s a negotiation process, not a quick fix. The right agent can streamline communication, handle lender approvals, and protect your financial future.