Loading

What is a Short Sale?

What is a Short Sale?
Updated on
March 24, 2021

An increase in foreclosure rates will inevitably bring with it an increase in short sales. But what is a short sale?

A short sale happens when you sell your house for less than your remaining mortgage balance, the proceeds of which go to the lender and in return the lender forgives the remaining balance. Selling your home as a short sale is one way to avoid foreclosure.

As a general rule, lenders lose money when they foreclose on a property. Consequently, they would rather not have to foreclose if it can be avoided. A short sale represents an opportunity to cut their losses because a short sale usually allows them to recoup more of the cost of the loan than a foreclosure process would.

Short Sale Documents

However, don’t think that a short sale is an easy thing to accomplish. In order to get permission for a short sale, you must provide documentation showing a genuine financial hardship. And don’t think that the decision for accepting a short sale is solely in the hands of the lender. Sure the lender must first agree, but this is not the final word. If there is mortgage insurance involved, this company also gets input on the decision. If there is an investor backing the mortgage, they also get input as to whether to accept a short sale.

Problems with Short Sales

The transaction process for a short sale can be rather cumbersome as well, whether you’re on the buying or selling side. Many short sales fail due to additional demands by the lender, such as requiring the broker to reduce his or her commission and/or that the seller signs a document requiring him or her to pay back the shortfall.

If you’re on the selling side of a short sale, consider having your agent or other experienced professional negotiate with your lender for a better deal. And remember, if the lender does accept a short sale and forgives part of your debt, that is considered taxable income and you must declare it as such to the IRS.

Schedule an Appointment

Additional Financial Considerations
from Financial Experts

No items found.
What is a Short Sale?
who can get a short sale?
Whether your first second, or dream home, we find you the perfect property.
How do you start a short sale?
We sell your home quickly & efficiently getting offers for your property.
Short sales
We find you the perfect office & commercial location for you.
Benefits of a short sale
Amazing Luxury Real Estate throughout Texas
Benefits of a short sale
Find the best residential, commercial & land investments.
What is a short sale?
We help you relocate your home, business & life to Houston.
Short Sale Documents
Mortgages, Titles,  estates. Learn more about purchases.
Problems with Short Sales
Contact us for help with your real estate sale or purchase.

Texas Real Estate Information & Categories

the right property, the first time
Find your next property

Contact us to find your next property. We find you the best beginner or luxury home or commercial & business real estate opportunities.

Check out these other great blogs & sites

ADWilliams RealtyBlox NewsFrankly LegalCPGIO Ecommerce ServicesPaleo RanchRemus LawThe ProfessionalistTrustablesXclusive CollectiblesZara Law Group
home for sale on, New luxury Construction in Texas, New builds in Cypress
For Rent
For Sale
Luxury Home Build in Cypress, TX
10931 Water Hyssop Lane
new luxury listing in Cypress Texas, new home build or sale in Cypress, Luxury real estate in cypress TX
3
Bedrooms
home for sale on, New luxury Construction in Texas, New builds in Cypress
2
Bathrooms
home for sale on, New luxury Construction in Texas, New builds in Cypress
For Rent
For Sale
New Luxury Home Construction in Cypress, TX
13811 Friarstone Pointe
new luxury home listing in Cypress Texas, new homes for sale in Cypress, Luxury homes in cypress TX
5
Bedrooms
home for sale on, New luxury Construction in Texas, New builds in Cypress
5.5
Bathrooms
12714 American Sweetgum Way, New home Construction in Texas, New Home builds in Cypress
For Rent
For Sale
New Home Construction
12714 American Sweetgum Way
ew home listing in Cypress Texas, new luxury homes in Cypress, Luxury homes in cypress TX
4
Bedrooms
12714 American Sweetgum Way, New home Construction in Texas, New Home builds in Cypress
3
Bathrooms
Contact Our Texas Real Estate Experts Today

Schedule a Free Texas Real Estate Property Consultation

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
10931 Water Hyssop Lane for sale Luxury home construction
For Rent
For Sale
Luxury Home Build in Cypress, TX
10931 Water Hyssop Lane
new luxury listing in Cypress Texas, new home build or sale in Cypress, Luxury real estate in cypress TX
3
Bedrooms
home for sale on, New luxury Construction in Texas, New builds in Cypress
2
Bathrooms
Luxury real estate for sale in houston
For Rent
For Sale
Newly Built Luxury Home
11706 BRANDON WAY
Houston luxury homes for sale
5
Bedrooms
Luxury real estate for sale in houston
5.5
Bathrooms
Beautiful home in the Grand Lakes Community!
For Rent
For Sale
Lake View Property
7602 HAMPTON BAY LANE
Luxury homes in Grand Lakes
4
Bedrooms
Luxury real estate in Katy TX
3.75
Bathrooms
Luxury Living in Timberlake Village!
For Rent
For Sale
Custom, One Owner Home
22918 TIMBERLAKE CREEK
Luxury real estate in timberlake village
4
Bedrooms
Homes for sale in timberlake village
2.5
Bathrooms

The Latest from the Walkthrough Blog

Pre move checklist
Moving can be incredibly stressful, but it doesn't have to be. With a little bit of preparation and planning, it's possible to streamline the entire moving process. Start by breaking down the move into manageable tasks and setting an overall timeline for when everything should be completed. Ready to create a stress-free plan for your move? Follow these tips from Pride Street Realty Group.
Home Ownership
Upsizing Your Home for a Growing Business
As a home-based business owner, it’s always exciting to watch your business grow and expand. But as your business grows, you may find that your home is no longer sufficient to support your needs. Whether you need more space for inventory, a dedicated home office, or a professional place to meet with clients, upsizing your home might be the solution you need. Moving into a bigger home is a major decision, so it’s important to plan your upgrade carefully. Check out the following tips to ensure your upsizing process goes as smoothly as possible.
Tips For Buyers
Understand Mortgage Processes and Paperwork
Buying or selling a home is an exciting period in everyone’s lives, but it can become overwhelming quickly, especially when it comes to keeping track of the paperwork. Misplacing documents can lead to closing delays or missed deals. To make sure you make it through the process as smoothly as possible, here are some helpful tips from Pride Street Realty on how to keep up with the paperwork that comes with the home buying and selling process.
Tips For Buyers
starting over in a new city
Embracing a vibrant new city can be an exhilarating prospect, especially if you've recently been through a hard time. Beginning anew in an unfamiliar place could feel overwhelming, however, which is why having a plan and smart advice is key for making the most of this fresh start. To help you out on your journey, Pride Street Realty has put together a few helpful tips that will make the process a little easier.
Tips For Buyers