What Is a Short Sale?
Understanding This Foreclosure Alternative for Minnesota Homeowners
A short sale occurs when a homeowner sells their property for less than the total amount owed on the mortgage, with the lender’s approval. In situations where keeping up with payments is no longer possible and the home is worth less than the mortgage balance, a short sale can be a dignified alternative to foreclosure.
When Is a Short Sale an Option?
Homeowners may consider a short sale when they:
- Owe more on the home than it’s currently worth (also called being “underwater”)
- Are facing long-term financial hardship (e.g., job loss, divorce, medical bills)
- Cannot keep up with mortgage payments and want to avoid foreclosure
- Need to relocate and cannot sell for enough to cover their loan
How Does a Short Sale Work?
- Hire a short sale specialist: Work with an experienced agent who knows how to navigate the lender’s process.
- Submit a hardship package: This includes a letter explaining your situation, income/expense breakdown, pay stubs, tax returns, and bank statements.
- List your home: Your agent will market your property and secure a buyer.
- Lender review: The lender will evaluate the offer and your documentation before approving or denying the short sale.
- Close the sale: Once approved, you finalize the transaction, often avoiding foreclosure and potentially having any remaining loan balance forgiven.
Benefits of a Short Sale
- Less damaging to your credit than foreclosure
- You remain in control of the home sale process
- May be eligible to buy again sooner than after a foreclosure
- Avoids eviction and legal proceedings tied to foreclosure
Risks & Considerations
- Approval is not guaranteed — the lender must agree
- Forgiven debt may be taxable (consult a tax advisor)
- The process can be time-consuming and paperwork-intensive
Is a Short Sale Right for You?
Every homeowner’s situation is unique. As a Minnesota short sale expert, I’ve helped dozens of clients avoid foreclosure with smart, proactive solutions. Let’s talk through your options and determine the best path forward — no pressure, just perspective.
📘 Read our full short sale guide
📞 Schedule a confidential short sale consultation
Joe Houghton
Broker Associate | RE/MAX Results
Certified Short Sale Expert – Minnesota Property Group
📞 (763) 300-2702
🌐 www.mnpropertygroup.com
