Short Sales: A Better Alternative to Foreclosure

A short sale — selling your property for less than the mortgage balance with the lender's approval — is often the best outcome for homeowners who can't afford to stay but want to avoid the devastating consequences of foreclosure. A short sale is significantly less damaging to your credit than a foreclosure, allows you to walk away without a deficiency (if negotiated properly), and gives you more control over the timeline and the transition.

The short sale process begins with listing the property with an agent experienced in short sales. You'll need to demonstrate financial hardship (the same documentation required for a loan modification), provide a purchase offer, and submit a complete short sale package to the lender. The lender evaluates whether the offer price is reasonable relative to the property's market value, and whether a short sale is a better financial outcome than foreclosure — which it almost always is, because foreclosure sales typically net far less.