Welcome or Register

Back to Table of Contents

What is a Short Sale Anyway?

An increase in foreclosure rates will inevitably bring with it an increase in short sales. But what is a short sale?

A short sale happens when you sell your house for less than your remaining mortgage balance, the proceeds of which go to the lender and in return the lender forgives the remaining balance. Selling your home as a short sale is one way to avoid foreclosure.

As a general rule, lenders lose money when they foreclose on a property. Consequently, they would rather not have to foreclose if it can be avoided. A short sale represents an opportunity to cut their losses because a short sale usually allows them to recoup more of the cost of the loan than a foreclosure process would.

However, don’t think that a short sale is an easy thing to accomplish. In order to get permission for a short sale, you must provide documentation showing a genuine financial hardship. And don’t think that the decision for accepting a short sale is solely in the hands of the lender. Sure the lender must first agree, but this is not the final word. If there is mortgage insurance involved, this company also gets input on the decision. If there is an investor backing the mortgage, they also get input as to whether to accept a short sale.

The transaction process for a short sale can be rather cumbersome as well, whether you’re on the buying or selling side. Many short sales fail due to additional demands by the lender, such as requiring the broker to reduce his or her commission and/or that the seller signs a document requiring him or her to pay back the shortfall.

If you’re on the selling side of a short sale, consider having your agent or other experienced professional negotiate with your lender for a better deal. And remember, if the lender does accept a short sale and forgives part of your debt, that is considered taxable income and you must declare it as such to the IRS.

Back to Table of Contents
agent photo
Mark Schults

P.O. Box 768
Neotsu, OR 97367
Phone: 541-992-3485
Email: markschults@gmail.com

Testimonials

When we were looking for a house to buy a few years ago, we called Mark Schults at Coast Property. He seemed to know what we were looking for and showed us several in our price range. He never tried to sell us something we didn't want. We were both impressed with his sales ability. He also has a great sense of humor, which we appreciated. Now, three years later, we listed our house with Mark, and he sold it and got us the best deal that he could. We would recommend him highly to anyone who is looking for a house in this area. They just don't come any better!!! Ben and Janice
A friend suggested we use Mark when we decided to buy a vacation home in Lincoln City. We are so glad we did. He patiently showed us many homes so we could find just the right one. As we changed our minds on what type of home we wanted, Mark continually found more homes to fit our needs. His sense of humor, honesty, and willingness to go above and beyond made this purchase much easier. Thank you, Mark. Robert
View All
agent photo
Mark Schults

P.O. Box 768
Neotsu, OR 97367
Phone: 541-992-3485
Email: markschults@gmail.com

MLS membershipREALTOR® certification

Real Estate Websites by iHOUSEweb iconiHOUSEweb | Admin Menu