What is a Short Sale Anyway?

2 min read

An increase in foreclosure rates will inevitably bring with it an increase in short sales. But what is a short sale?

A short sale happens when you sell your house for less than your remaining mortgage balance, the proceeds of which go to the lender and in return the lender forgives the remaining balance. Selling your home as a short sale is one way to avoid foreclosure.

As a general rule, lenders lose money when they foreclose on a property. Consequently, they would rather not have to foreclose if it can be avoided. A short sale represents an opportunity to cut their losses because a short sale usually allows them to recoup more of the cost of the loan than a foreclosure process would.

However, don’t think that a short sale is an easy thing to accomplish. In order to get permission for a short sale, you must provide documentation showing a genuine financial hardship. And don’t think that the decision for accepting a short sale is solely in the hands of the lender. Sure the lender must first agree, but this is not the final word. If there is mortgage insurance involved, this company also gets input on the decision. If there is an investor backing the mortgage, they also get input as to whether to accept a short sale.

The transaction process for a short sale can be rather cumbersome as well, whether you’re on the buying or selling side. Many short sales fail due to additional demands by the lender, such as requiring the broker to reduce his or her commission and/or that the seller signs a document requiring him or her to pay back the shortfall.

If you’re on the selling side of a short sale, consider having your agent or other experienced professional negotiate with your lender for a better deal. And remember, if the lender does accept a short sale and forgives part of your debt, that is considered taxable income and you must declare it as such to the IRS.

Like this article? Share it

Share on facebook
Share on twitter
Share on linkedin
Share on pinterest

Want a Free Market Analysis?

Let us quickly and accurately assess your home's current value.

  • Spacious open concept
    floor plans
  • Up to 4 bedrooms
    2 full bathrooms (per plan)
  • Hardwood flooring by Shaw®
    in foyer, powder room
    & kitchen
  • Wall to wall carpet by Shaw®
  • Designer lighting fixtures
  • Solid oak stained railing
    (per plan)
  • Baseboard moulding
  • Two panel style interior doors
  • Brushed nickel handles
    & hinges
  • 12×12 porcelain floor
    & wall tiles in full baths
  • Walk in owner’s bedroom
    closet (per plan)
  • Ventilated closet shelving
  • Two phone & cable outlets
  • Smoke/carbon monoxide
    detectors per floor
    & bedrooms
Energy Saving
  • Air infiltration wrap
  • Exterior joint sealing
  • Double pane insulated
    vinyl windows
  • R-49 attic insulation
  • R-15 exterior wall insulation
  • R-30 insulation in overhangs
  • Energy efficient natural
    gas heat
  • Electric central air conditioning
  • Honeywell programmable
  • Kohler® water saver toilets
  • Kohler® plumbing fixtures
  • 1 & 2 car garage (per plan)
  • Low maintenance vinyl siding
  • Seamless aluminum gutters
    & downspouts
  • Elegant front door
  • Concrete leadwalks & stoops
  • Asphalt driveway
  • 2 hose bibs (per plan)
  • 2 exterior electrical outlets
    (per plan)
  • Exterior light fixtures (per plan)
  • Professionally designed
    exterior finishes
  • Custom paneled shutters
  • Doorbell with chime
  • Mailbox
  • Architectural shingles
  • Sod front yard
  • Pressure treated deck
    (per plan)
  • Public water & sewer
  • Professionally designed
    landscape package
  • Optional Grill Package
  • 42″ designer cabinets
  • Granite kitchen counters
  • Kohler® faucets
  • Stainless steel sink
  • Quality GE stainless steel
    appliance package
  • Generous storage pantry
    (per plan)
  • Ice maker rough-in
Exceptionanl Brands You Can Trust
Builder commitment
  • Hexa/L10, LLC
  • 2-10 Homebuyers Warranty
  • 10 year structural
  • 2 year mechanical
  • 1 year fit & finish
  • Manufacturer’s
    limited warranties

Detailed Welcome Package​

When you join the company, EXIT Realty will send you an Associate welcome package containing resources and materials to get you out of the gate quickly. It also contains a special gift, Born To Be Exceptional, and Accelerated Farming; The Advertising System That Never Fails, books written by Founder & Chairman, Steve Morris.​


MEMO (Managing EXIT’s Momentum Online) is EXIT Realty’s central database and the secure, online engine behind our unique business model, The EXIT Formula. MEMO tracks every EXIT listing and transaction, every closing, every region, brokerage and agent and every sponsorship (through retirement and death) across the continent. MEMO feeds appropriate information to the Resource Center, exitrealty.com and select third party sources to ensure data integrity.

Exit's Resource Center (RC)

Much more than a warehouse of marketing and administrative resources, the RC is the private member’s area of exitrealty.com accessible only to our Associates. In this information hub, associates can access all of EXIT’s technology resources as well as fresh content, best practices, and training resources. Associates can also view their own production and the production of the people they’ve sponsored.


The aim of EXIT’s Ancillary Network is to provide EXIT Associates with an exclusive selection of companies whose products and services can help to maximize your business. Our Premier Partners and Approved Suppliers are carefully reviewed and selected based on credibility in their industry, special pricing and/or unique offers as well as their ability to fill a niche for EXIT.


EXIT Promo Shop provides a huge selection of more than 4,000 marketing pieces to help you find, get and keep clients as well as sponsor agents. This powerful promotional tool makes it easy to create customized flyers, brochures, postcards and other marketing materials demanded by sellers and appreciated by buyers. EXIT Promo Shop also combines an exceptional contact management system with top tier online and offline drip marketing campaigns. EXIT Promo Shop Print contains a selection of marketing pieces and is free to all associates.


With EXIT Realty’s Expert Marketing Suite™, you have the technology you need to maximize your listing’s exposure and generate and capture leads. Included as a benefit of your EXIT membership at no additional cost, this suite includes a customizable, branded and unbranded virtual tour which is syndicated to popular real estate portals, a downloadable flyer, a custom website created exclusively for every eligible EXIT Realty listing with its own unique web address, a photo gallery, virtual tour and lead generation technology built-in, and more. EXIT Realty has also provided a marketing video to show prospective sellers how this technology will position their home above the competition. Every EXIT Associate has access to our Expert Marketing Suite™ when their brokerage has completed the MLS paperwork to allow us to import IDX data.


Get your contact information directly into the palm of a prospect’s hand by using EXIT’s Mobile Business Card™technology. Choose a vanity code which prospects can text to 85377 to receive your Mobile Business Card™ on their smartphone. The system notifies you when someone has requested your MBC and delivers their mobile number right to your phone. Your Mobile Business Card™ included as a benefit of your EXIT membership at no additional cost.


These valuable sessions provide best practices, tips and techniques. Recordings are available on-demand in the Media Library section of the Resource Center.


Included in EXIT Realty’s Expert Marketing Suite™, all EXIT associates have access to our Smart Sign™geolocation lead generation technology. Interested buyers can text EXIT to 85377 in front of any EXIT listing and instantly receive property information on their smartphone. The listing agent receives the lead on his or her mobile device. It’s all possible when the brokerage has completed the MLS paperwork to allow us to pull IDX data.


The EXIT Achiever is the exclusive corporate publication of EXIT Realty Corp. International. This comprehensive branding, listing, sponsoring and social media tool is made available to all EXIT Associates as a multi-functional promotional piece that crosses all marketing borders.


A Support representative can be reached Monday to Friday, 10 hours a day, by live chat through the RC, by phone or by email to answer questions and provide training on all of EXIT’s programs, tools, resources, and technology.


EXIT Realty’s corporate website features a comprehensive and easy-to-use home search. Leads generated fromexitrealty.com on EXIT listings are emailed directly to the listing agent. Leads on properties listed by other companies are emailed to an EXIT brokerage determined by our detailed algorithm as the best one able to help the customer. No additional fees are charged by EXIT Realty Corp. International on any leads generated from exitrealty.com. Also, all of EXIT’s technology is accessible on any mobile device.


A portion of every transaction fee received by EXIT Realty Corp. International is pledged to its non-profit organization of choice, and to-date $3.5 million has been pledged to Habitat for Humanity. In addition EXIT Realty recognizes that a person’s emotional, physical and spiritual well-being are keys to their overall quality of life. To this end the company’s Focus on Good Health initiative includes a series of articles, tips and tools promoting wellness at work and home. Visit exitrealty.com/beyond to find out more.


we'd love to have your feedback on your experience so far