What sellers should know about selling a house on short sale

by Tina Broyles, DRE 01009212 & NMLS 91630 02/19/2023

Personal holding up a sign

What does it mean to sell a house on short sale? A short sale property can sell quickly due to having a low asking price, making them an attractive option for many buyers. However, on the seller's side, the process and reasoning is more complex. Here is a basic rundown of what a short sale means in real estate:

Understanding a short sale

Short sales are properties offered at a lower price compared to the balance remaining on the seller's mortgage. In a short sale, the proceeds go directly to the lender rather than to the seller.

A short sale is often a strategy for avoiding the foreclosure process, but can also be helpful in times when the real estate market is either stagnant or in a downturn.

Special considerations

A short sale can be a great option in a pinch, but there are some downsides to consider. Primarily, though short sales are not as damaging as foreclosures, they still negatively affect your credit score. Also, short selling rarely negates the remaining mortgage debt - though there are multiple ways lenders can handle the situation.

Despite the name, a short sale process is actually quite lengthy and complicated - often taking up to a year to process completely. Therefore, they should not be considered a "quick fix" to a financial hardship or down market.

Short sale alternatives

If you're facing foreclosure and considering a short sale, research all your options before committing. Talk to your lender about renegotiating your payment plan or modifying your loan. While loan modifications may temporarily reduce your credit score, the lasting damage will be significantly lower than the alternative.

If you have private mortgage insurance (PMI), you have other options. Sometimes, your PMI company can help bring your payments up to date, though you'll have to repay the advance eventually.

Can I receive relocation assistance for a short sale?

Sometimes a bank can grant relocation services in the event of a short sale. Relocation assistance is paid in advance for relocation expenses and helps facilitate the transition to another residence if needed.

A short sale request must be approved by the lender before the process can begin. While the process can be difficult, it can be an advantageous choice in a variety of circumstances. 

Discuss your situation with your mortgage lender or a trusted real estate agent to learn more about whether short selling is the right way to sell your home.

About the Author
Author

Tina Broyles, DRE 01009212 & NMLS 91630

HELLO.... Im a California Bay Area Resident serving the Real Estate community since 1987!

I serve people with professionalism, knowledge and care and my business has grown to almost 100% referred as a result.

Happily married with two grown children and two beautiful granddaughters, Audrina & Chesney! 

I love to golf, exercise, Bible study & serve the Homeless weekly in Milpitas.

I support our businesses and our community.

I'm well known and respected by my peers in our community. Voted Best of Milpitas every year since 2000-2020 until we relocated to San Jose in 2020

One of the compliments we consistently hear is how responsive we are to our client’s needs. That is so important to us!

I'd be honored to get to know you and your family and put my real estate experience to work for you!

ABOUT MY BUSINESS:

My Team represents a diverse array of skills and provides the perfect balance of experience and professionalism working in the Bay area. Our technology capability is beyond expectation!

CAL BRE #01009212#01009212 NMLS #2441#2441