What is a “Short Sale”?


WHAT IS A SHORT SALE? A “Short Sale” (Also referred to as: “Negotiated Settlement”, “Short Pay” or “Pre-Foreclosure”) occurs when a Lender agrees to accept less than the amount owed on the original note or total payoff, as an alternative to foreclosure. If the property is worth less than the amount owed on the loan, then even if the Lender forecloses and takes back the property, they know they are going to take a loss. We can often convince a Lender that they will “do better” if they take less than what is owed now, rather than taking the property back by foreclosure and trying to re-sell it.


HOW LONG WILL IT TAKE?    The Short Sale negotiation process can be rather lengthy. It may take several weeks to several months for an approval.  It is important to be patient during this long process. If there are more than one loan on the property, then we have to deal with an approval from two lenders and this will complicate the process.


BUT MY HOUSE IS GOING TO FORECLOSURE, WILL I HAVE ENOUGH TIME? Maybe-Maybe not. Just starting a Short Sale will NOT automatically stop a foreclosure. However, many times we can convince a Lender to stop the foreclosure by contacting the lender with proof you are attempting to sell your home through a Short Sale. While there are no guarantees, it is worth the attempt.


CAN I STAY IN THE HOUSE?    The key word in a “Short Sale” is sale. The purpose of a Short Sale is to get the property sold. This does not mean, a foreclosure can be stopped indefinitely, and allow you to keep the house. A foreclosure is stopped for a period of time, each situation is different. The sooner you list your home to sell with a realtor, as a Short Sale, the more time you have in selling the home and having a successful short sale.


HOW DO I KNOW THIS WILL WORK? Again, there are no guarantees. We cannot, have not, and will not make promises to you that this will work. Once you miss a payment, the Lender is in charge and can proceed to foreclosure if they want to. We know they do not want to sell your home as a Short Sale, and we are very good at presenting alternatives to the Lender, in liu of a foreclosure. We are very proficient at what we do, but NO GUARANTEES are being made as to whether or not the Lender will accept the Short Sale.


WILL I GET ANY MONEY FROM THE SALE?  No. The borrower will not get any proceeds from the sale of the property. The Lender is going to take a loss on your loan, they are most certainly not going to allow you to profit from the situation. This includes any impounds you may have.


WHAT HAPPENS IF THIS DOESN’T WORK? Your house will likely go to foreclosure. A Short Sale is something we try after you have exhausted your other options.

If you need help regarding a foreclosure please email your contact information to Susan@HomeBuySusan.com or call us for a FREE Consultation at 530-328-1980. There is no cost or obligation. We are here to help you find an alternative to foreclosure.