Andrew J. Abu Inc., Realtors®
Mark Peris, Andrew J. Abu Inc., Realtors®Phone: (508) 523-6239
Email: [email protected]

What it means to sell a house on short sale

by Mark Peris 11/21/2022

Personal holding up a sign

What does it mean to sell a house on short sale? A short sale property can sell quickly due to having a low asking price, making them an attractive option for many buyers. However, on the seller's side, the process and reasoning is more complex. Here is a basic rundown of what a short sale means in real estate:

Understanding a short sale

Short sales are properties offered at a lower price compared to the balance remaining on the seller's mortgage. In a short sale, the proceeds go directly to the lender rather than to the seller.

A short sale is often a strategy for avoiding the foreclosure process, but can also be helpful in times when the real estate market is either stagnant or in a downturn.

Special considerations

A short sale can be a great option in a pinch, but there are some downsides to consider. Primarily, though short sales are not as damaging as foreclosures, they still negatively affect your credit score. Also, short selling rarely negates the remaining mortgage debt - though there are multiple ways lenders can handle the situation.

Despite the name, a short sale process is actually quite lengthy and complicated - often taking up to a year to process completely. Therefore, they should not be considered a "quick fix" to a financial hardship or down market.

Short sale alternatives

If you're facing foreclosure and considering a short sale, research all your options before committing. Talk to your lender about renegotiating your payment plan or modifying your loan. While loan modifications may temporarily reduce your credit score, the lasting damage will be significantly lower than the alternative.

If you have private mortgage insurance (PMI), you have other options. Sometimes, your PMI company can help bring your payments up to date, though you'll have to repay the advance eventually.

Can I receive relocation assistance for a short sale?

Sometimes a bank can grant relocation services in the event of a short sale. Relocation assistance is paid in advance for relocation expenses and helps facilitate the transition to another residence if needed.

A short sale request must be approved by the lender before the process can begin. While the process can be difficult, it can be an advantageous choice in a variety of circumstances. 

Discuss your situation with your mortgage lender or a trusted real estate agent to learn more about whether short selling is the right way to sell your home.

About the Author
Author

Mark Peris

Mark comes to us with extensive experience in the real estate industry with over 20 years of experience working with buyers, sellers, and builders. Mark has been an active member of RACM, REALTOR Association of Central Massachusetts, since 2001 and has built a formidable reputation in Worcester county.

Consistently ranked among the top 10 Realtors in Worcester county with career sales totaling 300 million in pending and sold, Mark is an extremely valuable resource for those getting ready to list their home, purchase a new home, or build from the ground up.

As a Shrewsbury native, and a seasoned real estate professional, Mark joined Andrew Abu REALTORS and works side-by-side with a talented team of industry experts who specialize in market trends and local market stats, to keep ahead of the curve and combine home marketing with innovative technology and forward-thinking. His valued reputation with client's and business partners for the past two decades and proven success with record setting sales, will leave you in capable hands during any real estate transaction.