Short Sale – Is It the Right Decision For You?

You and your family may be facing a tough decision regarding your home. If you are behind on payments or worried about the declining value of your home, a short sale may be a good option for you. Many people are facing hardships now and if you find yourself in that position it is nothing to be ashamed of. Life is full of joyous times as well as challenging times. All you can do is keep a positive attitude and make the best of a bad situation.

The easiest way to describe a short sale is that it is like qualifying for a loan in reverse. Back when you bought the home you had to submit loads of financial paperwork to prove to the lender that you can qualify for the loans and repayment. Now, you are asking the lender to take less than a full payoff of the loan by submitting financial paperwork showing you cannot repay the loan. Your lender has an incentive to work with you to do a short sale on the home because a short sale will be less costly in the long run versus a foreclosure. So let’s explore scenarios where a short sale could be a good option for you and your family.

If you are experiencing a loss of income either due to a downgrade at your job or loss of your job then you may qualify for a short sale. With less income, you likely won’t have the ability to meet all your bills. Your lender will take this into account in determining your ability to repay the loan. Though if you have other assets or money in the bank the lender may not look favorably on a short sale at this time.

Another common reason for a short sale is a divorce. Many times a husband and wife purchase a home together then later separate. This is essentially a loss of income as now only one person lives in the house but both may still be obligated to repay. These situations can get a little tricky as it involves a personal relationship but as long as both people want to work it out the short sale can be done.

Another unfortunate reason for a short sale could be illness or death in the family. If you are unable to work and suffer from a severe medical condition you may qualify for a short sale. The loss of income will qualify you for a short sale. Or, if your spouse were to pass away unexpectedly that would be a loss of income as well.

A less common reason that a short sale could be allowed is for a home that needs extensive repairs and might be unlivable. Many times the repair and maintenance of a home can overwhelm people. Particularly if their income is curtailed for a period of time. If a roof can’t be repaired or replaced the resulting water damage could make the home unlivable. In these instances, a lender could allow for a short sale to sell the home since you may not have the ability to repair it.

There are a lot of other reasons you may qualify for a short sale. Everyone’s situation is unique and requires qualified attention from a Realtor who is a short sale expert. The main concern is your hardship and how we can best help. Take the time to discuss a short sale with your family and trusted Realtor.


Short Sale Frequently Asked Questions