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A Guide to Short Sales – Everything You Need to Know About Short Sales
Short Sales

Short Sales

Have you ever been told to steer clear of short sales? Have you ever heard that short sales are a great deal? How do you know which one to believe?

The short sale process can be a complicated time-consuming. Most short sales are not completed in less than 30 days. Many ask if short sales are worth the extra effort? Before believing the hype about them or that its low price is too good to be true, it is essential to understand how the short sale process works. A real estate attorney can help navigate the process.

A short sale occurs when the lender is willing to accept less than the amount owed on the mortgage. To be considered a short sale, the net proceeds of the home sale, after paying off all liens and closing costs, would be insufficient to pay what is owed on the mortgage.

Avoiding foreclosure is the primary advantage to going through the short sale process. Lenders do not enter into short sales lightly and will try their best to recover as much of their losses as possible. A lender is not required to accept any offer, even if the buyer and seller agree on the terms. 

Short Sales vs. Foreclosures

Short Sales

The homeowner must initiate the sale of their house, and the home must be worth less than what the homeowner would receive from the sale after payment of the mortgage and all other liens and the seller’s closing costs.. The lender must ultimately approve the sale, or the short sale can not proceed. If the lender believes the property is worth more than the contract price the lender may “counter” with a price they will approve.  It would then be up to the buyer to meet that number for the sale to proceed.The short sale process can be frustrating, lengthy, and unpredictable because a lender can deny a short sale even when the buyer and seller agree on the terms.


When a foreclosure takes place, the lender initiates the process by filing a lawsuit against the homeowner who is in default of the mortgage. The process ends by the property being sold at auction to the highest bidder. The lender forces the sale of the house in hopes of recovering as much of the original loan amount as possible. The winning bidder, often the lender, will evict any homeowners still living in the home after the foreclosure process concludes. What makes a foreclosure even more problematic, the homeowner still remains obligated for any unpaid balance on the mortgage.

The main advantage of a short sale versus a foreclosure is that in most cases the homeowner will be relieved of any obligation to pay the unpaid balance of the mortgage.  Because they are voluntarily giving up their home, and not being forced by a bank, homeowners typically prefer short sales to foreclosures. Additionally, homeowners can obtain a mortgage after a short sale after only two years instead of waiting for seven after a foreclosure. 

The Short Sale Process

  1. The homeowner works with a real estate agent to list the property, and once a buyer is found, a sales contract is signed. This contract is subject to the lender’s approval even if the buyer and seller agree to its terms.
  2. Once the contract has been signed, the homeowner initiates the short sale process by submitting a short sale package to their lender. The homeowner must explain why they are no longer capable of making mortgage payments. 
  3. The lender reviews the contract and can respond by rejecting, countering, approving, or not responding to the contract. 
  4. If the contract is approved, the short sale property closes, and the home belongs to the new buyer. The lender receives all proceeds from the sale of the property and releases the original homeowner from their mortgage loan—even though the full mortgage balance was not paid off by the proceeds.

Richard S. Weinstein

Because short sales are so complex, you’ll need a real estate attorney who can tell you if a short sale is right for your situation, you can trust to walk you through the process, and answer any questions you have along the way. 

Real Estate Attorney Jupiter

With over 50 years of experience as an attorney, Richard S. Weinstein assists clients with the important financial situations in their lives. Whether you are dealing with bankruptcy, real estate (both commercial and residential, including short sales, foreclosures, and title insurance), estate planning, probate, business formations, or sales or mergers, Richard S. Weinstein is the attorney with the education, experience, and knowledge you need! Call us at (561) 745-3040 or visit his website at



Law Office of Richard S. Weinstein, P.A.
250 S. Central Blvd. #101
Jupiter, FL 33458
Phone: (561) 745-3040


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