Q:    What is a Short Sale?
A:    When there is not enough equity/profit from the sale of a property to fully pay off the existing loan(s), a short sale may be an option under certain circumstances.  If the lender(s) accepts a discounted payoff instead of the actual loan amount that is currently owed, you may be able to get your home sold, pay off the loan and ultimately avoid foreclosure.

Q:    Why would a lender accept a Short Sale?
A:    The majority of mortgage lenders want to work with home owners that are faced with a financial hardship and are unable to meet their mortgage obligation.  Most lenders would prefer to settle the matter with you rather than take the property back through the foreclosure process. As you consider the option of pursuing a Short Sale, it is important to remember that your lender is looking to limit any potential loss on your loan. In many cases, your lender has determined that it is better to do a short sale rather than go through the foreclosure process. 

Q:    If I do a Short Sale, will it go on my credit?
A:    Yes, a short sale will show up on your credit report as a compromised sale (short sale).  However, the affect of a short sale on a seller's credit report is less damaging than a foreclosure.  If you are trying to decide whether to let a home go into foreclosure versus attempting a short sale, salvaging your credit is the main advantage to doing a short sale.  But it is in your best interest to seek legal and tax advice before making a decision.

Q:    Can anyone apply for a Short Sale?
A:    A seller cannot simply decide to sell a property at a loss by asking for a short sale.  Typically, there needs to be a verifiable hardship that is acceptable to the lender(s).  Hardship examples include: divorce, job loss, death, health issues, family crisis, reduction of income, etc.