Foreclosure in 32819>Question Details

Lesley Nivens, Real Estate Pro in Decatur, TX

How deeply 'underwater' (what percentage) can you be when looking at a short sale?

Asked by Lesley Nivens, Decatur, TX Wed Mar 25, 2009

Help the community by answering this question:


I work a lot of short sales and what I have seen is a trend to show that you have maximized the return to the current lender. Don't give up, try to short sell. There is no given formula that says one thing or another. Each lender is different, each situation is different and each market is different. The bank ultimately decides. Get that contract and let the bank determine what they can and cannot live with (or without).
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1 vote Thank Flag Link Wed Mar 25, 2009
There is no hard, fast concrete answer when it comes to "percentage" underwater. Doesn't matter, differs from lending institution. Think about the short sale, don't walk away (foreclose), it hammers your credit harder.

Just my two cents.
Highest and best regards,

Vincent Paige
REALTOR®| Century 21 Elite Home Finders
Certified BPO Specialist
5401 S. Kirkman Rd., Ste 725 | Orlando, FL 32819
Direct: 407.256.8190 | Fax: 407.264.8073
0 votes Thank Flag Link Sat Dec 31, 2011
Banks evaluate the market value when a offer is submited. The bank will look at the information provided by your listing agent. Make sure that your agent is aware of how to deal with short sales and see if that agent has had experience with you lender. The more experience you agent has doing the short sales and experience with your lender the better. It is worth trying to do a short sale and see what the lender will do.

Good luck
0 votes Thank Flag Link Thu Mar 26, 2009
Hi Lesley,

There is no rule of thumb on the percentage of debt owed as to when a lender will allow a short sale, as it is up to the lender whether or not to "bless" a short sale. As long as a notice of default has not been filed and foreclosure proceedings not yet begun, you should call your lender to discuss whether or not it would allow a short sale. Before you pick up the phone you should speak with a Realtor and be aware of the current value of your home and have a list of comparable sold properties in your neighborhood.

Keep in mind that your lender does NOT want to be stuck with another home, so if you argue a strong case that your Realtor is going to price your home right and work hard to get it sold, most lenders will give you their blessing to do so. Remember to GET THIS IN WRITING from your lender. You will also need to give your written permission to your lender that will allow your agent to contact the lender and discuss your loan and sale of your home throughout the selling process. Find an aggressive agent who knows how to speak with lenders and is willing to be in constant communication with your lender.

You should keep a dated log and write down all your communications with your lender, and any pertinent changes should be received in writing before proceeding. I have written a book entitled Mortgage Walkaway Options that discusses options to foreclosure. You can find it at It is a terrific resource for anyone who needs to get educated and understand possible options. Best of luck to you.
0 votes Thank Flag Link Wed Mar 25, 2009
With todays market in decline the ever changing values are a major part of a short-sale. How much underwater is a good question.
The Mortgage(s) remain as a constant against value that is declining which widens the gap. The lender wants to get the most they can for the property and sometimes going into forclosure can net more than a short sale, That depends on the note.
There is no hard and fast formula as each leander is different.
Realtor Rick.
0 votes Thank Flag Link Wed Mar 25, 2009
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