Short Sale

An ideal option for moving forward in your life

A short sale is selling a home for less than the balance owed to the lender. The sales price is short of the mortgage balance. This is an excellent option for avoiding foreclosure if the balance you owe on the property is greater than the property’s value today. Your lender must approve the short sale and accept a discounted payoff. The lender will also pay most of the selling expenses at close of escrow and, in some cases, some of the homeowners moving expenses.

Short sales are unique and complex transactions —
they require lengthy preparation and the skilled negotiations and creative problem solving of a short sale specialist. Most realtors do not have this expertise or knowledge of the many options available—even if they say they do.

To qualify for a short sale, the homeowner must show financial hardship, defined by lenders as the result of extenuating circumstances forcing the homeowner to no longer afford mortgage payments.

Examples of hardship: loss of income, unemployment, divorce, illness, job transfer, death. The property must be devalued by market conditions and its liabilities must be more than the sales price.

The Bay Area’s Leading Short Sale Experts Since 1995

At Real Estate Asset Protection, we work tirelessly to help homeowners and lenders minimize their losses through mutually amicable short sale solutions. Our short sale representation enables homeowners to be protected and helps them make a fresh start.

Our services are free. The only remuneration we earn is our commission on the short sale, paid by the lender at the close of escrow. Be ware of consultants charging upfront fees!

Short Sale – The Win-Win Solution

Through our representation, every party benefits.

  • Sellers win: Sellers avoid foreclosure and keep it off the public record, avoid deficiency judgments, protect their credit from the negative impact of a foreclosure and can repair their credit faster. They can make a fresh start and be in the position to purchase a home again after 24 months.
  • Buyers win: Buyers have the opportunity to purchase a home for slightly under market value.
  • Lenders win: Short sales cost lenders 20-30% less than foreclosures.
  • Realtors win: Realtors earn a commission on the short sale transaction paid by the lender at close of escrow.

Credit Benefits & Tax Considerations

There are important credit benefits of selling your home through a short sale. Your credit file is marked “short sale—paid in full,” and you are able to qualify for a new home loan after 24 months.

Conversely in a foreclosure, your credit file shows “debt discharge due to foreclosure,” which can reduce your credit score by over 250 points. Further, you must wait 5 years to qualify for another home loan with additional requirements: 1) you can only purchase a principal residence and must have a minimum 10% down and a 680 credit score, 2) you are not permitted to purchase a second home or investment property, and 3) there is no cash-out refinancing permitted on any occupancy type.

Tax considerations, helpful resources:

  • Federal: Review the Forgiveness Debt Relief Act of 2007 at
  • California: Review the Mortgage Debt Forgiveness Law of California at
  • Monitor new proposed mortgage debt forgiveness bills here

Please contact your CPA or experienced tax professional to learn how these laws affect you.

Our services reach out to all Bay Area counties and the entire state of California.

We are here to help

Ildiko and Kate’s honest, hard and supportive work during the many months was incredible. This has brought me such peace of mind. Finally, I am able to breathe.”

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