We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

In Real Estate, what is a Short Sale?

By Rosemary R.
Updated May 17, 2024
Our promise to you
WiseGEEK is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At WiseGEEK, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

There are few options available to homeowners when they are facing foreclosure. Since foreclosure inevitably scars a homeowner’s credit for many years, anyone searching for ways to prevent foreclosure should investigate the option of a real estate short sale. Basically, a short sale involves a lender who agrees to take less than what is owed on a mortgage. Although it involves a certain amount of extra work, it can be a winning situation for both homeowner, lender and ultimately a buyer.

When a lender is faced with a large amount of foreclosures, their financial health begins to deteriorate. They are in business to make money closing loans and servicing them. Owning too much real estate stops a lender's flow of money, in addition to costing a lender additional legal fees. While all lenders won't be willing to engage in a short sale, it's worth a try for homeowners facing foreclosure.

In order to be considered for a short sell, homeowners must meet certain qualifications. Mortgage payments must be late or the lender must have already started the pre-foreclosure process. If a hardship is forcing a homeowner into a foreclosure, they may qualify for a short sale as long as the hardship can be documented in detail. In addition, the lender may request copies of the homeowner's bank statements and asset statements to ascertain whether there are any available funds to pay the debt.

Another factor involved in a short sale is the current value of the home. A home that has a market value that is less than what is owed on the home is a candidate for a short sale. The market value is usually determined by neighborhood comparables and documented through an appraisal.

When a short sale is possible, it's best to contact a realtor who is experienced with real estate short sales. A knowledgeable realtor will be able to guide a homeowner through a successful sale. It may also be necessary to speak with an accountant or income tax professional to investigate any possible tax implications. Even though all of these steps are followed, remember that a short sale may still show up on a credit report for several years.

WiseGEEK is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Discussion Comments

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGEEK, in your inbox

Our latest articles, guides, and more, delivered daily.