What are the qualifications for a short sale?


A short sale is allowed to be performed on all types of properties. From condominiums or retirement communities to farms and single family residences, the main qualification for a short sale is that you owe more on your loan than what your property is worth. Secondly, you must be suffering some sort of financial, physical or mental hardship. Many lenders have dropped the required hardship explanation, however. A qualified hardship can include many things, such as:

  • Loss of employment or reduced hours
  • Major illness or medical expenses
  • Divorce
  • Increased bills
  • Higher living expenses
  • Investment Loss
  • Changing loan terms or loan payment increase
  • Concerning loan terms/High interest rate
  • Inability to save for retirement
  • Increased anxiety
  • Loss of home equity and inability to refinance

What is a hardship letter?

A hardship letter is simply a letter written to the bank explaining why the homeowner would like to pursue a short sale. Our short sale services include helping you prepare and send a hardship letter as part of the short sale application. You can download an example of a hardship letter here .

But what if I don't have a hardship?

While some lenders do not require a hardship explanation, other lenders will require at least some explanation of why you cannot pay your mortgage. Our experience is that ALL banks and lenders have very lenient rules about what they consider to be a hardship. Please give us a call at 1‑800‑760‑9156 and we can discuss what type of hardship requirements your lender has, and what you can do if you think you do not have a valid hardship. A common misconception about short sales is that you have to be out of money to qualify. Having cash savings in the bank, or even situations where you are currently making more money than you have in the past will not necessarily disqualify you from a short sale.