Shortsale Guide
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Distressed homeowners foreclose/give up their homes because they were not informed of their options. In this tough market, it is best to know what short sales really are before deciding to do one. My greatest success has been to educate my clients on all of the possibilities in the real estate market so that these distressed homeowners can come out with the best outcome. This is the difference between having an almost 100% short sale approval success rate versus other agents who can barely accomplish one short sale. I hope that this Short Sale Guide help you make an educated decision on short sales.

For additional literature, please visit the links on the left side of the page

These are questions that my clients have asked in the past. You may have similar questions, so I hope that this short guideline will help you become knowledgeable in shortsales after reading this guide.


  • Short Sale Questions #1: What is a Short Sale? 
    A Short Sale is when a homeowner's property is sold for less than it is owed and has to be approved by the lender/bank

  • Short Sale Questions #2: My property is upside down. What are my options?
  • A. Foreclosure
        Give up the home and walk away. Property is then sold in an auction, also known as a Trustees’ Sale.
    B. Deed-in-Lieu
        Give the Title back to the lender.
    C. Modification
        Negotiate with the lender to change the terms on your loan.
    D. Short Sale
        Negotiate with the lender to see if he will accept the purchase price of a property for less than its owed.

  • Short Sale Questions #3: Of the three, which hurts your credit the most?
    Foreclosure. You ruined the mortgage contract with the bank, and will not be able to purchase another home for at least 7 years.

  • Short Sale Questions #4 : If I don’t want to go into foreclosure or deed-in-lieu, how should I decide between modification and Short Sale?
    Modification: If you want to continue to live in your current residence, then you should attempt to work with your lender to see if you qualify to modify the terms of your loan.
    Short Sale: If you want to get rid of your financial distress and move on, then short sale is the other way to go.

  • Short Sale Questions #5: Is doing a modification the right choice for me?
    If you are able to make your monthly mortgage payments, but it is straining your income a little, then a modification may work.  Most modifications will be re-adjusted for 6 months then reevaluated. It is not a long-term solution if you are deeply financially distressed.

  • Short Sale Questions #6: Is doing a short sale the right choice for me?
    Generally speaking, if you are no longer able to pay for your monthly payments and the difference between your mortgage price and selling price is too high to pay, then a short sale is a clean way to break off your distress.

  • Short Sale Questions #7: Do I have to pay for any closing costs, agents’ commission, etc., in a short sale?
    No. When the lender approves of the short sale, they are incurring the monetary aspects of the transaction, including all closing costs, agents’ commissions, title fees, etc. In modifications, there are fees for doing it, but in short sales, the lender covers the cost.

  • Short Sale Questions #8: Are all lenders willing to do short sales and why?
    The bank already understands that they are going to incur a loss, so they want to choose the route that cushions the least loss. Short sales prevent them from having to pay foreclosure costs: acquiring the property, assigning a property manager, paying for repairs, etc. In comparison, a short sale saves them about 10% of those costs. The faster they can turn over a negative asset, the better.

  • Short Sale Questions #9: Who is qualified to do a Short Sale?
    Financial trouble or adverse reasons that show your hardship. More information is location on the left side of this page.

  • Short Sale Questions #10: Is a hardship necessary?
    Yes, whether it is financial or medical reason, the banks will not accept without one. Examples of hardships are:
    - Separation or Divorce 
    - Medical Bills 
    - Inability to work due to health reasons 
    - Death of Spouse 
    - Job Relocation 
    - Reduced Income or Unemployment 
    - Business Failure
    -…Etc.

  • Short Sale Questions #11: What is the difference on my credit with a Short Sale?
    There is a huge difference between a foreclosure and a short sale. More information is location on the left side of this page.

  • Short Sale Questions #12: Do I have to be behind on my payments to do a Short Sale?
    No. You can do a short sale without being late at all.

  • Short Sale Questions #13: If I have already done or attempted a modification from my lender, can I still do a Short Sale?
    Yes.  Doing a modification does not affect your ability to do a short sale.

  • Short Sale Questions #14: What is the Short Sale Approval Rate?
    ≈60%. Sellers may back out of the deal, agents may not be experienced, pricing may be too high, too many reasons as to why it’s so low.

  • Short Sale Questions #15: What is Mike’s Short Sale Approval Rate?
    Aside from sellers’ decisions to back out, I have maintained a 91%+ short sale success rate.

  • Short Sale Questions #16: Why is there such a big approval rate difference between Mike’s Team short sales versus other Short Sales?
    The biggest reason is because short sales need to be carefully negotiated between agent and lenders. The art of negotiation, time, and ways of doing things does not come easily to all real estate agents, especially those without a lot of experience. I have real estate negeotiators who specialize in doing short sales, a well-formulated short sale timeline, and excellent relations with short sale lenders to ensure that my clients’ short sales get approved.

  • Short Sale Questions #17: How long does a short sale take to get Short Sale Approval?
    From 2012, banks have sped up the approval process to 2-3 months, which is a vast improvement from previous years. They are constantly working on improving the short sale approval time due to the government support, and short sale approval times may increase in the future.

  • Short Sale Questions #18: Can I gain any equity in the short sale process?
    No. Because there is already a negative difference between the mortgage price and your home’s selling price, the bank will be reaping in any gains that happen in the selling process, if any. The bank is eating up your negative cost, so you do not get any equity from it.

  • Short Sale Questions #19: If I do a short sale, what kinds of items in my home can I keep?
    Like a regular/standard sale, anything that is permanently attached to the home stays with the home. Permanently installed items that you wish to take with you or to be sold separately must be stated with the buyer before signing the first purchase contract. 

  • Short Sale Questions #20: I have decided to do a short sale. How long does it take to find a potential buyer?
    For my short sale properties, I only allow showings for 1-2 weeks after listing, and close the door till the bank’s approval. This reduces the time that my clients have to be bothered with showings and live a normal life for the remainder of their time in their home.

  • Short Sale Questions #21: That is a really short showing time; will you find a suitable buyer for my Short Sale that quickly?
    Because I am a Certified Short Sale Specialist, I have a large investor/buyer database that are waiting to get on my short sales and multiple online and print advertisements to just name a few. Also, because of my strong rapport with local agents, many agents are more inclined to work with me because they know it will be an easy and successful short sale transaction. It is 99.9% certain that I will get multiple offers on every property I represent.

  • Short Sale Questions #22: The bank is still annoying me about my home’s financial state. How should I respond to them during the Short Sale process?
    Once the short sale authorization letter is signed, I will take care of everything that has to do with your home from there on out. All calls and letters can be forwarded to me and I will communicate with the bank so that you do not have to worry about it. During this time, I will also be sure to keep you updated on the short sale process so that you do not miss out the state of your short sale.

  • Short Sale Questions #23: During the Short Sale approval process, do I have to maintain the upkeep of my home?
    Yes. Not only are we looking to get approval from the lender, we want to keep our potential buyers as well. After 2-3 months of the short sale, you do not want them to re-look at the home they want to purchase and think that it has deteriorated. Minor maintenance like lawn trimmings and tidiness is a must.

  • Short Sale Questions #24: Should I prepare to move out as soon as I start the short sale process, even before approval?
    Before short sale approval, you do not have to prepare to find a new residence. Once you hear that your short sale has been approved and your home is about to enter escrow, is about the time to start looking for new residence. When you move out is up to you, but it must be finished at the close of escrow.

  • Short Sale Questions #25: If I don’t want to do a Short Sale in the middle of the approval process, am I allowed to cancel the transaction?
    Yes, as long as you cancel the transaction before the bank approves of the short sale property and both seller and buyer have signed to enter escrow.

  • Short Sale Questions #26: Will there be any monetary ($) penalty for cancelling my transaction midway?
    Because of the extraneous nature of the short sale approval process, many agents may charge a cancellation fee if you cancel after the bulk of the work has been accomplished. Please contact me for my personal short sale written policy.

  • Short Sale Questions #27: If the short sale does not get approved, do I have to pay for any costs?
    No. If for any reason the bank decides that they do not want to accept a short sale on a particular property, then you do not have to pay any costs.

  • Short Sale Questions #28: How long is the short sale escrow transaction time?
    This is similar to regular sale escrow times. Cash transactions normally around 14 days, all other short sale escrow transactions between 30-45 days. Most banks will ask for ASAP.

  • Short Sale Questions #29: The Short Sale Buyer is asking to fix certain parts of the home. Do I have to pay?
    All homes are sold as-is in a short sale. If the bank approves of fixing the home, then they will be the ones responsible for paying for it.

  • Short Sale Questions #30: There are a lot of fraudulent Short Sale companies out there that are promising amazing modification results. How do I tell the difference?
    1. Never pay up front! No up-standing company would make you pay without delivering the results first.
    2. How long has the Short Sale Company been established, do your research on Google (look up Company X Review or Complains.)
    3. Definitely DO NOT give away any rights to your property title to anyone. Giving away your title does not relinquish your mortgage debt, but takes away your rights to the property.
    4. There is no such thing as a free lunch! If the short sale deal sounds too good to be true, it might just be that!