14 Options to prevent foreclosure
Short Sale
Help selling your home for less than what's owed, avoiding foreclosure.
Sell Your Home for Less Than You Owe—With the Lender’s Approval and No Foreclosure
What Is a Short Sale?
A Short Sale is when you sell your home for less than the amount owed on your mortgage, and the lender agrees to accept the lower payoff as full satisfaction of your debt. This means you can walk away without foreclosure and without owing the difference.
It’s a powerful option for homeowners who want to avoid foreclosure but can’t sell their home for enough to pay off the loan.
Who Should Consider a Short Sale?
- Homeowners with negative or limited equity
- Those who want to avoid foreclosure but can’t afford to keep the home
- People who have been denied a loan modification or don’t qualify
- Homes that are in poor condition and need major repairs
- Sellers who want to exit the situation with dignity
- Hire a real estate agent who specializes in short sales.
- Submit a short sale package to the lender including:
- Hardship letter
- Financial documents
- Listing agreement
- Offer from a qualified buyer
- The lender orders an appraisal (called a BPO – Broker Price Opinion).
- If the offer is close to market value, the lender approves the sale.
- You sell the home, pay no money out of pocket, and the lender forgives the remaining debt.
Benefits of a Short Sale
- Stops foreclosure once accepted by the lender
- No out-of-pocket cost to the homeowner
- Often includes a full debt forgiveness agreement
- Less damaging to credit than foreclosure
- Allows for a dignified and professional exit
- May qualify for relocation assistance ($3,000–$10,000)
Considerations & Risks
- Approval process can take 30–90 days or longer
- Requires a complete financial package and hardship documentation
- Must have a serious buyer and a knowledgeable agent
- Lender may reject the offer if it’s too low or missing paperwork
What You’ll Need to Apply
- Hardship letter
- Mortgage statements
- Income and expenses
- Last 2 bank statements
- Listing agreement with a certified short sale agent
- Purchase offer from a ready buyer
Timeline
- Property listed: ASAP
- Offer submitted: Once buyer is found
- Lender review and approval: 30–90 days
- Closing: Typically 2–4 weeks after approval
- Foreclosure paused once sale is in process with a serious buyer
Real Example
The Reyes family owed $490,000 on a home worth $410,000. They were 5 months behind and facing foreclosure. We submitted a short sale offer, got it approved in 32 days, and the family received $6,000 relocation money. Their credit score dropped far less than a foreclosure would have.
Frequently Asked Questions
Q: Will I owe the difference after the sale?
🅰️ Most lenders include a deficiency waiver that fully forgives the remaining balance. This must be confirmed in writing.
Q: Can I stay in the home during the process?
🅰️ Yes. You can usually stay until escrow closes, giving you time to move without being evicted.
Q: Can I short sell if I have a second loan or HELOC?
🅰️ Yes, but all lien holders must approve. We can help negotiate with both lenders.
Ready to Sell Your Home and Avoid Foreclosure?
Our team includes certified short sale specialists who will:
- Handle all communication with the lender
- Market the property and screen buyers
- Submit and negotiate the short sale package
- Get your debt forgiven and foreclosure canceled