Frequently Asked Questions

A short sale is when you sell your home for less than what you owe on the mortgage, with your lender's approval. The lender agrees to accept the sale proceeds as satisfaction of the debt, even though it's less than the full amount owed. It's called "short" because the sale falls short of paying off the full mortgage balance.

In a foreclosure, the bank takes your home through legal proceedings and sells it themselves. With a short sale, you maintain control of the sale process—you choose the buyer, set the timeline, and negotiate the terms. A short sale typically has a much smaller impact on your credit score than foreclosure (often 50-100 points less), and you may be able to purchase another home in as little as 2 years versus 7 years after foreclosure.

Generally, you may qualify if you owe more than your home is worth (or close to it), are experiencing financial hardship that makes paying your mortgage difficult, and cannot refinance or modify your loan. Financial hardship can include job loss, reduced income, divorce, medical expenses, death of a spouse, military deployment, or other significant life changes. We can evaluate your specific situation in a free consultation.

The deficiency balance is the difference between what you owe on your mortgage and what the home sells for. For example, if you owe $250,000 but the home sells for $200,000, the deficiency is $50,000. Without proper negotiation, lenders can sometimes pursue you for this amount. We work hard to negotiate deficiency waivers, where the lender agrees to forgive this balance entirely.

Our goal is always to negotiate a full deficiency waiver, meaning you walk away owing nothing. In most cases, we're successful in achieving this. However, the outcome depends on your lender, investor guidelines, and your specific situation. We'll be transparent about what we expect to achieve and will fight for the best possible terms on your behalf.

The timeline varies depending on your lender and situation. Most short sales take 3-6 months from listing to closing, though some can close faster and others may take longer. The largest variable is how quickly your lender processes the short sale package and makes decisions. Our experience helps us streamline what we can control and navigate lender delays effectively.

A short sale will impact your credit, but typically far less than a foreclosure. Most people see their credit score drop 50-150 points, compared to 200-300+ points for foreclosure. More importantly, the recovery time is faster—you may be able to qualify for a new mortgage in 2-4 years after a short sale versus 7 years after foreclosure.

No. While many homeowners who pursue short sales are behind on payments, it's not required. If you're current but experiencing financial hardship that will make future payments difficult—or if you're significantly underwater on your home—you may still qualify. Each lender has different requirements, and we can help you understand your options.

Yes. You can remain in your home throughout the entire short sale process until closing day. This gives you time to plan your next steps and transition on your own schedule, rather than being forced out by foreclosure proceedings.

There can be tax implications, as forgiven debt is sometimes considered taxable income. However, the Mortgage Forgiveness Debt Relief Act and other provisions may exempt your forgiven debt from taxation, especially if it's your primary residence. We strongly recommend consulting with a tax professional about your specific situation. We can help connect you with qualified advisors.

Our services cost you nothing. We're paid by the lender at closing through a standard real estate commission, just like any other real estate transaction. You never pay us out of pocket—not for consultations, processing, negotiation, or any part of our service.

Second mortgages and HELOCs can complicate a short sale, but they don't make it impossible. We'll negotiate with all lienholders to reach an agreement. Junior lienholders typically receive a small payment to release their lien. While these situations require more negotiation, we have experience navigating them successfully.

Typically, you'll need to provide: recent pay stubs or proof of income, last two years of tax returns, recent bank statements, a hardship letter explaining your situation, and authorization forms allowing us to communicate with your lender. We'll guide you through exactly what's needed and help you compile everything properly.

Once the lender approves the short sale and a buyer is found, the transaction closes much like a regular home sale. You sign closing documents, the buyer receives the property, and the lender receives the sale proceeds. With a deficiency waiver, you walk away free of your mortgage obligation with no remaining balance to pay.