How Do Short Sales Work?



Short sales are starting to pop up in our current market again. What is a short sale? I’ll answer that question today.

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What is a short sale?

A short sale happens when the borrower (or homeowner) of a loan owes more on a home than what it is actually worth in the current market. The homeowner will then short sell the property to the bank.

In these transactions, the biggest decision-maker is not the owner — it’s actually the lender or bank. If the seller owes $600,000 and you offer $500,000 for the property, the lender is the one who will accept or reject your offer.

The lender or bank will accept or reject your offer during a short sale.


Most short sales are also hardship sales. Hardship includes a death in the family, a divorce, or job loss.

There are many different nuances to a short sale and we are starting to see them again in this market. As the market slows down a little bit, homeowners may find that they owe a lot more on their property because they made an offer that is higher than what the property is actually worth.

If you have any other questions about short sales or about real estate in general, give me a call or send me an email. I would be happy to help you!