Short Sale

In a short sale, the servicer allows the borrower to list and sell the mortgaged property with the understanding that the net proceeds from the sale may be less than the total amount due on the mortgage.

The short sale must be an arm’s length transaction (to a family member) with the net sale proceeds (after deductions for reasonable and customary selling costs) being applied to a discounted (“short”) mortgage payoff acceptable to the servicer. The servicer accepts the short payoff in full satisfaction of the total amount due on the first mortgage.

Short sales are better than being foreclosed on because your credit will not be marked with the loss of a home.

Typical Short Sale Requirements 

• Provide all information and sign documents required to verify program eligibility.
• Cooperate with the listing broker to actively market the property and respond to servicer inquiries.
• Maintain the interior and exterior of the property in a manner that facilitates marketability.
• Work to clear any liens or other impediments to title that would prevent conveyance.
• Make the monthly payment stipulated in the Short Sale Agreement, if applicable.

TIP:  Although Short Sales have been streamlined, they may be lenghty and the requirements are very stringent.

Do not vacate your home. Keep it occupied until you have a contract and the sale is approved by the lender.