Short Sale or not?

Asked by Banks3854, Long Beach, CA Wed Mar 13, 2013

What happens if I sell my home for more than what I owe, but after all closing and commission is paid the total comes to less than what's owed? Would this now be considered a short sale since the net is less than owed? And if so, what will happen since we didn't get permission to sell as a short sale?

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Kawain Payne, Agent, Seal Beach, CA
Thu Mar 21, 2013
In order to have a short sale you must have short sale approval.

If you know you will have a shortage at the sales price you currently have I suggest you try to :

1.Increase the sales price
2. Take a second look at the commission rate
( My fellow realtors may be happy with me on this one)
3. Try and get short sale approval, if you truly cannot increase the sales price
4.Ask yourself is this really the right time to sale? May a refi would be better

Best of Luck to you!!!!

Kawain Payne, Realtor
1 vote
Roberto Gosim, Agent, Carson, CA
Wed Mar 13, 2013
Hello Banks3854,
Looks like you did your research.
All the answers are great.

As of now, if can hang in there try to.
The market is picking up.
Probably in the 3 to 6 months you
will have no problem selling.
If you have no problem with your credit
yet, try to do a refinance.
The rates are low. Just call mortgage
lender and ask.
If however you must sell, there's help for you.
If you're positive it will be a short sale, you can do the HAFA
program. If you qualify, they will help with up to $3,000.
Plus, depends on the banks, the recent one I closed, BA
help my sellers with another $7,000 for a total of $10,000
to help with moving expenses.

Hope this helps.

C21 Action!
1 vote
Banks3854, , Long Beach, CA
Wed Mar 13, 2013
I actually haven't sat down with a realtor yet since I'm not completely convinced that I want to sell. But now that I know the answer, I understand what I need to do. Thank you to everyone for the great answers!
1 vote
Daniel Modin, , Long Beach, CA
Sat Jul 13, 2013
Completely agree with what Roberto (and many other agents below) are selling. You could try refi first, and if that doesn't work, THEN you could go for shortsale again (even if you didn't get a permission first time). The prices are going up, and many buyers are willing to pay extra, so you might not need a shortsale at all. Also, even though most agents don't want to bother with less than 3%, you may find others willing to work for less commission (mostly newer agents, just to get their name out there and to get a closed sale).

One point that many didn't mention, are you keeping up with your payments or falling behind? That could make a difference in the bank's decision about shortsale, because they have to see and calculate whichever will be less of a loss to them.
0 votes
Cheryl Fried…, Agent, Rolling Hills Estates, CA
Fri Jul 12, 2013
Good afternoon,

I just wanted to follow up with you to see if you ended up selling or not. Since March values have been steadily appreciating and inventory is still low. My last few transactions have been over asking and buyers are paying over market value. Now might be the time to take action.

If you want to know what your home is worth now please contact me and I would love the opportunity to assist you.

Have an exceptional day!

Cheryl Friedman
0 votes
Kawain Payne, Agent, Seal Beach, CA
Thu Mar 21, 2013
In order to have a short sale you must have short sale approval.

If you know you will have a shortage at the sales price you currently have I suggest you try to :

1.Increase the sales price
2. Take a second look at the commission rate
( My fellow realtors may be happy with me on this one)
3. Try and get short sale approval, if you truly cannot increase the sales price
4.Ask yourself is this really the right time to sale? May a refi would be better

Best of Luck to you!!!!

Kawain Payne, Realtor
0 votes
Emily Knell, Agent, Huntington Beach, CA
Wed Mar 13, 2013
With your previous question from Sep of 2010 it sounds like you're in the high majority amount of homeowners who are being jerked around by their lien holders. I bet they were happy as heck to keep offering you hope of getting a loan modification so long as they kept receiving "trial payment plan" payments here & there.

If you have cashed out equity as part of a refinance in the past, it is only in a short sale that I can get the bank to agree to NEVER pursue you in the future for a deficiency judgment.

I have buyers looking for homes in Long Beach, if the numbers are right maybe I can sell it & you won't be short, it is possible. I'm currently looking for a 4b on a good lot size.

You don't need "permission" up front anyway, from your bank to short sell. You don't need to call them up & say "I need to short sell" & then they need to decide, 'well OK'. We would submit them an offer from a buyer, along with a Settlement Statement & that's how they become aware that you're short & I negotiate with them from there on what is acceptable to them, to net.

However there's just no way to make it work & not be short, it will end up being a short sale it is VERY IMPORTANT to have the Realtor you choose, show you ON the MLS that they Do have a HIGH Success Rate closing the short sales they list As the Listing Agent (the one negotiating with the bank) It's unfortunate, homeowners don't even know to ask for this.

You wouldn't go see a brain surgeon who has a 30-50% fail rate would you?

Shoot me an email directly so we can talk about this further. I don't look back on this same Trulia posting for answers posted after mine.

Emily S. Knell
562-430-3053 c
Realtor Since 1996
Realty ONE Group
Short Sale Listing Agent w/ 97% success rate
100% in the past 5yrs.
Closing short sales within 300mi of my home!
0 votes
Bill Eckler, Agent, Venice, FL
Wed Mar 13, 2013

While the fees and expenses associated with the sale of a home can be fairly accurately calculated it is unfortunate that in a changing market determining the price at which a property will sell can be a challenge....

With this said, in some cases it is not easy to determine whether a short sale is the route to go from the beginning. There can be some trial and error involved in the process.

If your scenario were that you were only a small amount off from the bank owed amount it may be best to find some way to make up the difference without going the "short sale" route. This would save your credit without going through the challenges of a short sale and your property would get sold.

In the event, it is clear from the beginning that the money needed to close your transaction is going to be short......and by a lot, it may be best to start the sale as a short sale from the beginning.

One of the early steps in the short sale process is declaring and completing the necessary paperwork. This includes a "letter of hardship" which in your own words(or the words of your attorney) defines your situation and describes why you are in a situation that required you to make this request. Once this is accomplished and your lender is willing to work with you, it's a matter of finding a buyer, negotiating the price, and getting the bank on board with the contract price. This step can be a challenge and may require additional negotiations between the buyer and your lender.

Hope this information is helpful.

0 votes
Jim Olson, Agent, long beach, CA
Wed Mar 13, 2013

I work with investors, it sounds like if you sell without paying commissions and closing costs you will not sell short. Sometimes these investors will pay all of your closing costs, so there is no cost to you to sell.

Jim Olson
Main Street Realtors
0 votes
Hi Jim, How are you doing. good too see you. :)
Flag Wed Mar 13, 2013
Edith Karoli…, Agent, Winnetka, IL
Wed Mar 13, 2013
First of all my understanding from you question is that the bank did not accept a short sale!
What you will need to try to do is price your home in a way that you hopefully will come out even, if not
it means simply that you will have to bring money to the closing table. But if you have a good Realtor he or she will be able to provide you with an up-to-date market evaluation, price your property in a way
that after closing expenses you may just come out without having to bring money to the table...

See what the most recent numbers tell you.
Good Luck
Good Luck to you

Sincerely yours,
Edith YourRealtor4Life & Chicago, North Shore & Northern Illinois Expert
Working always in the very BEST interest of her clients, Buyers, Sellers and
Investors alike....And always with a SMILE :)

Covering for @Properties Chicago & suburbs, and with her trusted Partner
Agents US & world wide properties. French, German, some Spanish &more or
Check out my website at
Get to know me! Learn about my experience, expertise, services! Read letters
of recommendation! Sign up to search for properties in my expanded service area.
0 votes
Nick Resendez, Agent, Cerritos, CA
Wed Mar 13, 2013
If the net from the sale of the home minus all closing costs including commissions is not enough to pay off all the lien to the bank(s) then yes it would be short. A seller could pay the difference in cash and it would not be a short sale.

If the seller did not have the cash to do so then they would have to apply to the bank to consider the short sale with all the appropriate documentation. If a seller was that close I would like to see the current market value as prices are going up almost 1% per month in many local areas!

Call if you need me
0 votes
Barbara Gran…, Agent, Anaheim, CA
Wed Mar 13, 2013
Hi Banks,

Have you had a comparative market analysis done within the last month or so? Prices have gone up recently in Southern Calfiornia so you may no longer be short. If you haven't done so, have your agent run the numbers again for you. Things may be better than you think!

Best of Luck,

Barbara Grandolfo
0 votes
Julia King, , Long Beach, CA
Wed Mar 13, 2013
Hello Banks3854, You have to apply to the bank to do a short sale...they will need to see a hardship. The bank will look at your financials and either approve you or not. You will forgiven the debt and they pay commission too.

Certified Distressed Property Expert,
Short Sale & Foreclosure Resource,
Certified HAFA Listing Agent Specialist
RE/MAX College Park Realty
T: 562.972.5464 (KING)
DRE License #01181726

Behind on your Mortgage?
Foreclosure Help at
0 votes
Lesley Harris…, Agent, Huntington Beach, CA
Wed Mar 13, 2013
Very Good Question. How much short are you? Are you in a hardship? if you can not afford the difference and can show this to the bank, they may consider a short sale. When you first sat down with your realtor, we always have to do what we call a Seller's Net Sheet (Before We Place On The Market) so this would of been explained in the very beginning. The next step is to talk with the bank and see what they will do and see if the parties involved (title, escrow, realtors) can give in a little bit and help make the deal work. You may have to come up a little bit out of pocket as well if you really need to sell now. Or just wait another couple months, the market is picking up and you can most likley sell without being short.

Now is a really good time to sell while the inventory is low.

Lesley Harris, Realtor
Cal Tex Properties
(562) 673-0943

0 votes
Sheila Caron, Agent, Long Beach, CA
Wed Mar 13, 2013
Typically, when a seller's net is shy of full payoff amount, the seller is asked to bring in the shortage to close. If you want to now short sale your home, this will have to be negotiated with your current buyer since you may be contractually obligated to close per your contracts. Your real estate agent will be able to help you with the next step.
0 votes
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