What is a Short Sale?

We always have the home owners best interest as our #1 focus.
A Short Sale is a sale of Real Estate in which the proceeds from the sale fall short of the balance owed on a loan secured by the property owner. In a Short Sale, the bank or the mortgage lending institution agrees to discount a loan balance due to financial hardship on the part of the borrower.
Homeowners must qualify and be approved for Short Sale.
Comparing Short Sale to Loan Modification:
In a successful Loan Modification, you retain your home; whereas in a successful Short Sale, you no longer own the property upon the close of escrow. It's vitally important to understand that the bank or mortgage lending institution can deny both. With this understanding, watch for brokers and/or attorneys claiming that they have inside connections with the decision makers. These individuals and entities should be reported to the California Department of Real Estate (DRE) and/or The State of California Bar Association.
Both Short Sale and Loan Modification will affect your credit report and credit score. In most cases, individuals seeking Loan Modification are required to be delinquent on their mortgage which in itself will affect credit scoring significantly. Both options require proof of financial hardship which is often achieved by being delinquent on your mortgage.
We strongly advocate the Short Sale transaction and will likely not advocate Loan Modification until banks and lenders are routinely and, significantly, reducing the principal balance and interest rate. Your individual circumstances will dictate the best possible direction.
For many who purchased at the height of the market, it will be difficult to make their monthly mortgage payment, with or without a reduction due to a loan modification. In
some cases, the homeowner can hang on until real estate values stabilize and they eventually return to an equity position, however, that could take a significant amount of time.
A successful Short Sale will cost $0.00. The effects on your credit will likely be more harsh than from a Loan Modification, but nowhere nearly as bad as if you did nothing and allowed a foreclosure to occur. With the shrinking credit industry, it is more mindful than ever to protect your credit report and credit score.