A short sale is discussed if the home owner is facing financial hardship and is therefore unable to make payments on the home loan. In the event that the bank or mortgage lender agrees to it, a short sale is an alternative solution when foreclosure is looming. “Short sale” literally translates to selling a piece of real estate just short of the remaining balance of the loan. Because the homeowner finds him or herself in a position where paying the loan just isn’t feasible, the lender will then discount the balance of the loan and the home owner will sell the property and forfeit all of the proceeds to the lender. By doing this, the lender concedes that selling the property at a loss is a better option than continuing to pursue the borrower.

There are four conditions of a short sale:

1. The home’s market value is down. This means that the home is worth less than the remaining balance on the home loan. Another way to say this is by saying that the home is "underwater".
2. The mortgage is in default or heading that way. A mortgage default occurs when the borrower stops making payments on the loan. At that point, the lender can seize the property from the borrower.
3. The home owner encounters hardship like divorce, death or serious illness, unemployment, bankruptcy, etcetera. It is important to note that personal lifestyle choices that cause financial strain are not considered.
4. The home owner has no assets. If the homeowner had assets, he or she could use these to make payments on the loan.

How do you know if you qualify for a short sale?

Whether or not a home seller can go through with a short sale ultimately depends on his or her bank or mortgage lender. They have to agree to the short sale process in order for it to come to pass. If the seller’s situation does not line up with the aforementioned four points, he or she may not qualify to sell their home on a short sale.

Any buyer can put an offer in on a home up for short sale so long as they are able to qualify for a loan. It is, however, up to the lender whether or not an offer will be accepted on the property.

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Mara Muller, Broker Associate, ABR, CRS
Premiers Sotheby's International Realty
Across from The Ritz-Carlton
325 Vanderbilt Beach Road
Naples, Florida 34108
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Since 1996, Mara Muller has been fortunate to call Naples home. For your benefit, she is a Certified Residential Specialist® (CRS, a designation earned by fewer than 3% of Realtors nationwide), an Accredited Buyer's Representative® (ABR), and e-PRO agent. Mara will focus your search for the perfect Dream Home or effectively market your house for its maximum price. Her expertise has been utilized by almost 150 Happy Buyers and Sellers in the past 9 years, resulting in approximately $100,000,000 in sales. Mara Muller has been honored by the Women’s Council of REALTORS® with the Top Producer Awards General Real Estate Sales three years in a row and Gulfshore Life magazine has awarded Mara "Five Star: Best in Client Satisfaction for each of the past 6 years, in addition to writing the monthly real estate column for the past 8 years for Neapolitan Family Magazine. A New England native, Mara is a graduate from The Moses Brown School in Providence, and McGill University in Montreal.

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