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Short Sales in Salt Lake City, Utah: What Is a Short Sale?

Short Sale Salt Lake City, Utah | SFR® Realtor Nancy Bergman

If you're struggling to make your mortgage payments, owe more on your home than it's currently worth, or are worried about foreclosure, you may have heard the term short sale.

So, what exactly is a short sale?

A short sale is when a homeowner sells their property for less than the amount owed on the mortgage, and the lender agrees to accept the proceeds from the sale as satisfaction of the debt, or under terms the lender approves.

It can be complicated. It can take time. And it's definitely not something you want to try to navigate without someone who understands the process.

That's where I can help.

What Is a Short Sale?

Let's say you owe $450,000 on your home, but in today's market the home may only sell for $400,000.

In a traditional sale, you would generally need to bring enough money to closing to cover the difference, unless other arrangements are made.

With a short sale, the lender may agree to accept less than the total amount owed.

The lender, not the homeowner's Realtor, makes the final decision about whether to approve the short sale.

Every situation is different, which is why getting professional advice early is important.

Why Would Someone Consider a Short Sale?

There are several reasons a homeowner may consider a short sale, including:

  • Financial hardship
  • Loss of income or employment
  • Difficulty making mortgage payments
  • Divorce or major life changes
  • Medical or other unexpected expenses
  • A significant drop in property value
  • Owing more on the mortgage than the home is worth
  • Wanting to avoid foreclosure

A short sale isn't the right solution for everyone. But for some homeowners, it may be an alternative worth exploring.

How Does a Short Sale Work?

Short sales generally involve more steps than a traditional home sale.

1. We Start With Your Situation

Before talking about listing the home, I want to understand what's going on.

We'll look at your mortgage, the home's estimated market value, your financial situation and what you're hoping to accomplish.

There is no judgment here.

My job is to help you understand your options.

2. Determine Whether a Short Sale Makes Sense

We'll look at what your home could realistically sell for compared with what is owed.

I'll help you determine whether a short sale may be something worth pursuing and whether you should speak with your lender, attorney, tax professional or other appropriate professional.

3. Gather the Required Documentation

Short-sale lenders typically require financial and hardship documentation.

This can include things such as:

  • Mortgage information
  • Financial statements
  • Income documentation
  • Bank statements
  • Tax returns
  • Hardship letter
  • Listing agreement
  • Purchase contract
  • Other documents requested by the lender

This part can feel overwhelming.

I'll help keep the process organized and let you know what is needed as we move forward.

4. Put the Home on the Market

If we're moving forward with a short sale, the home still needs to be listed and marketed properly.

That means determining an appropriate asking price, preparing the property, taking professional photos and getting it in front of potential buyers.

A short sale still needs a buyer.

My goal is to market the home to attract a qualified buyer while providing the lender with the information it needs to evaluate the transaction.

5. Receive an Offer

Once we receive an offer, it doesn't necessarily mean we're done.

The offer and supporting documentation are submitted to the lender for review.

This is where patience becomes especially important. It can take an average of 30-90 days. 

6. The Lender Reviews the Short Sale

The lender will review the financial information, property value, offer and other documentation.

They may accept the offer, reject it or request changes.

The process can take significantly longer than a traditional real estate transaction.

7. Closing

If the lender approves the short sale and all parties agree to the terms, we move forward toward closing.

The exact terms and consequences of a short sale can vary, so I always recommend that homeowners discuss their individual situation with the appropriate legal and tax professionals.

My Short Sale Experience

Short sales aren't new to me. When I first started in real estate, short sales made up a large majority of the homes on the market.

I started my real estate career in 2011, and in 2012 I worked with Elizabeth Weintraub in Sacramento, where I gained extensive experience working with short sales during a very different, and very challenging, real estate market.

I've seen firsthand how complicated these transactions can become and how important it is to stay organized, communicate and keep everyone moving in the same direction.

I also hold the SFR® (Short Sales and Foreclosure Resource) certification. That training, combined with my hands-on experience, gives me a deeper understanding of the short-sale process and the challenges homeowners can face.

How I Can Help

If you're considering a short sale, you don't need to have everything figured out before calling me.

Let's start with a conversation.

I'll help you understand:

  • What your home may realistically be worth
  • How much you may owe
  • Whether a short sale might be an option
  • What the process generally looks like
  • What documentation may be needed
  • How the home would be marketed
  • What happens after an offer is received
  • When you may need to involve an attorney, CPA or other professional

And most importantly, I'll keep you informed. I know this can be a stressful situation. My approach is to give you honest information, explain what's happening and help you make decisions based on your circumstances.

Short Sale vs. Foreclosure

A short sale and foreclosure are not the same thing.

A short sale is a voluntary sale of the property with lender approval when the proceeds are not enough to pay the mortgage balance in full.

Foreclosure is a legal process a lender may use to take possession of a property when the borrower defaults on the loan.

Whether a short sale is preferable to foreclosure depends on the homeowner's specific circumstances.

There can also be legal, tax and credit implications associated with either situation, so it's important to get advice from the appropriate professionals.

I can help you understand the real estate side of the process and connect you with the right professionals when questions go beyond my role as your Realtor.

Thinking About a Short Sale?

If you're behind on your mortgage, worried about foreclosure, or simply don't know what your options are, don't wait until you're out of options to ask questions.

You can talk to me before making any decisions. We'll sit down, look at the numbers and talk about what's happening with your home. 

No judgment. No pressure. Just information.

I'm Nancy Bergman, your Salt Lake City and Salt Lake County Realtor, and I'm here to help homeowners navigate complicated real estate situations—not just the easy ones.

Want to know what your home is worth in today's market? Click here

If you think a short sale might be an option, let's talk.

Nancy Bergman
Your Neighborhood Realtor
Salt Lake Home Pros | Homes International
858-617-9449
nancybergmanrealtor@gmail.com