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How to Qualify for a Short Sale (What Lenders Look For)

  • dawntherealtor13
  • Dec 22
  • 2 min read
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Every lender has their own guidelines—but across the U.S., the approval requirements are surprisingly similar.

If you’re behind on payments, underwater on your mortgage, or facing a major life change, you may already meet the qualifications.

Below is exactly what lenders review when deciding whether to approve a short sale.


1. You Must Have a Legitimate Financial Hardship

The lender needs to see that continuing your mortgage payments is no longer realistic.

Common approved hardships include:

  • Job loss or layoff

  • Reduction in hours or income

  • Divorce or separation

  • Medical hardship

  • Disability or long-term illness

  • Death of a spouse or co-borrower

  • Sudden, unexpected expenses

  • Mandatory relocation

  • Loss of rental income

  • Significant increase in cost of living

If the mortgage is no longer affordable, this is usually the most important qualifying factor.


2. Your Home Is Worth Less Than You Owe

A short sale is only possible when the current market value is lower than your remaining mortgage balance.

If the numbers don’t line up, the lender likely won’t approve a short payoff.


3. You Cannot Sustain Future Payments

The lender will want to confirm that the hardship is not temporary.

They’ll evaluate your:

  • Income

  • Debts

  • Monthly expenses

  • Assets

Their goal is to confirm that continuing payments is financially unrealistic.


4. You Have a Qualified Buyer

A lender won’t approve a short sale without a solid buyer in place.

A strong, well-qualified buyer can speed up approval, reduce back-and-forth, and help you close faster.

This is where working with an agent experienced in short sale marketing truly matters.


5. You Provide All Required Documentation

Lenders need a full financial picture. This usually includes:

  • Hardship letter

  • Recent pay stubs

  • Bank statements

  • Tax returns

  • Mortgage statements

  • HOA info, tax balance, or escrow details

Don’t stress—we help gather, prepare, and submit everything for you.


6. No Misrepresentation or Fraud

As long as the information is honest, accurate, and complete, you’re in good shape.

Short sales move smoothly when everything is transparent and properly documented.


Why Most Homeowners Are Approved

Because lenders want to avoid foreclosure.

Short sales save them time, save them money, and give homeowners a dignified path forward—without the devastating impact of foreclosure.


What’s Your Likelihood of Approval?


Every situation is unique. We can walk through your hardship, mortgage balance, and property value to determine your best path—short sale or otherwise.


Short Sale Experts – Powered by Elevated Realty Group


 
 
 

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