These days, in real estate, the term short sales is frequently heard.   What is a short sale, you may wonder.  Well, let me explain it to you by giving you an example.  Let's say you bought a house two years ago with a mortgage of $200,000.  Let's say you've paid off $5,000 of the mortgage.  I'm just using random numbers, so don't worry about the math.  Fast-forward to now.  Your boss is offering you a job in California.  It's more of an order, really, and you take it.  You have to sell your home, and it's now worth $175,000 due to the recession.  So, after all the fees, you recoup $165,000.  You are still $30,000 short on your mortgage, and you don't have the money or assets to pay down the mortgage.   This is a short sale.  You and your agent will have to enter into short sale negotiations with your bank.

So.  How do you know if you are a candidate for a short sale?  First of all, you have to be experiencing a hardship.  The example I hypothesized above (relocation) is just one of 17 acceptable hardships.  Here's the full list:

  1. Loss of job
  2. Business failure
  3. Damage to property
  4. Death of a spouse
  5. Death of a family member
  6. Severe illness
  7. Inheritance
  8. Divorce
  9. Mandatory job relocation
  10. Medical bills
  11. Military service
  12. Payment Increase or mortgage adjustment
  13. Insurance or tax increase
  14. Reduced income
  15. Separation
  16. Too much debt
  17. Incarceration

In addition to having one or more of the above, you must be financially insolvent.   As I said,  you cannot have any liquid cash or assets that could be used to pay down the mortgage.

This is a brief summary of a short sale.  If you are in a situation like this, it'd would be helpful for you to contact an agent in order to help you with the process.  If you have any questions about short sales, feel free to contact me at

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