Short Sale Information



The Amon Team is

Short Sale & Foreclosure Resource Certified


What is a Short Sale?  A short sale is a situation in which the seller (1) owes more money on the loan (and any other liens on the property) than the sale of the property will likely produce on the market and (2) is unable or unwilling to bring money to closing.  In a short sale, the lender has not yet foreclosed on the property, which provides a window of opportunity for the owner to sell the property in order to at least partially satisfy the amount owed to the lender.

Why Short Sales Are Preferable to Foreclosure.  Short sales are considered preferable to foreclosures because short sales (1) lessen the impact a foreclosure can have on the surrounding community and (2) won't damage the distressed owner's credit as much as a foreclosure.  For example, if the borrower is still current with other payments, a short sale may lower the borrower's credit score by as little as 50 points.

Qualifying Sellers.  If a short sale is judged to be a distressed homenowner's best option, the real estate professional must be exacting and thorough in qualifying the homeowner for a short sale.  Not every owner is a short-sale candidate and, unfortunately, not every owner can be saved from foreclosure.

In the qualifying process, the real estate professional should confirm, among other items:

  • Whether or not the homeowner has a valid hardship
  • Whether or not there is sufficient time to accomplish a short sale
  • That the homeowner will contract or has already contracted with appropriate finance, tax, and legal professionals
  • The amount that is owed on the property
  • Whether or not the homeowner has liens in addition to the mortgage, e.g., tax liens, homeowner association (HOA) liens
  • The condition of the property
  • That the homeowner will be cooperative in completing the short-sale documentation and in maintaining the property for showings.

Common Results of Short Sales.  From a lender's perspective, there are many ways short-sale transactions may close:

  • The lender releases the lien and requires the seller to carry remaining debt on a payment plan
  • The lender releases the lien and requires the seller to liquidate other assets to pay some or all of the remaining balance
  • The lender releases the lien and forgives the remaining indebtedness

Avoiding Foreclosure


 Colorado Foreclosure Hotline-