Short Sales: Debunking Some Common, Yet Costly Myths About The Process

Just like with any good gossip column, there are bound to be myths that end up spreading like wildfire about the topic at hand, whether it comes from a good friend, water cooler conversation at the office or simply an uninformed agent.  The same holds true for short sales.  Here are a few myths we think you should know about before deciding if a short sale is right for you.

Myth #1: The borrower has to pay the bank the deficiency after the closing, so why bother with a short sale.

Truth is…In the past, banks required borrowers to pay the difference between what they owed on the mortgage and what the home sold for in the short sale.  On July 15, 2011, Governor Jerry Brown signed into California law that lenders could no longer pursue borrowers for any deficiency in a short sale.  This applies to ANY loans involved in the sale.

Myth #2: I will have to drain my savings before a bank will agree to a short sale.

Truth is…Banks will consider the financial assets of the borrower, however they will not necessarily be required to use the cash assets to fund the shortfall.

Visit to download your free information- packed copy of “How Savvy Homeowners are using Short Sales to Avoid Financial Ruin”.


Myth #3: I can’t afford to pay a real estate agent fees to complete my short sale.

Truth is…Short sales are a no-cost solution.  The bank will pay the agent’s commission, and all customary closing costs, such as escrow and title fees.  In some cases, banks even offer incentives, such as moving allocations that may put CASH in YOUR pocket!


For Toll-Free 24-hour recorded information about how savvy homeowners are using short sales to avoid financial ruin call (888) 746-7820


Myth #4: A short sale is just as bad on a credit report as a foreclosure or bankruptcy.

Truth is…A short sale shows up as a series of late mortgage payments on your credit report.  While a foreclosure will stay on your record for 5-7 years, and bankruptcy will remain for 10 years, a short sale affects your FICO score for 2-4 years.  In fact, Fannie Mae, Freddie Mac, and FHA guidelines all state that it is possible for a borrower to get a NEW loan to purchase a home within 12-24 months after a short sale is completed.  Lending Institutions look much more favorably upon those doing a short sale versus a foreclosure, in that the borrower is not walking away and leaving the bank with the full unpaid balance of the loan.

Myth #5:Once the bank starts the foreclosure process, there is no time to do a short sale.

Truth is…It’s never a good idea to wait for the last minute to decide to short sale your home.  California has a “non-judicial” foreclosure process.  This means that the banks do not have to take a borrower to court in order to foreclose on their home.  Legal foreclosure time frames allow for 90 days since the first late payment before the foreclosure process begins.  At this point, a borrower receives a “Notice of Default”.  This starts the clock ticking, and at another 90 days, a borrower receives a “Notice of Trustee’s Sale”.  This is the final notice that a borrower will receive.  Typically, without a short sale or bankruptcy in progress, a home will be auctioned or foreclosed on by the bank 21 days after the “Notice of Trustee’s Sale” is posted on the door.

Myth #6:I have a lot of debt, and I have to choose between doing a bankruptcy or a short sale.  If I proceed with bankruptcy, my home will be lost in foreclosure.

Truth is…Short sales and bankruptcies CAN work together!  Many homeowners are in this situation these days, and Fannie Mae guidelines now state that borrowers may qualify for a new purchase loan only 2 years after a bankruptcy has been discharged.  Many lenders will allow short sales to move forward during bankruptcy, as long as they have permission from the bankruptcy attorney and all parties involved.


Call us now to decide your financial future (before the bank does it for you).

 Our consultations are always free and no obligation.


You are not alone in your situation!  Give us a call today at (888) 746-7820 so that we may discuss your situation with you and present your options.  Don’t lose your home to foreclosure!  Walking away from your home is the WORST thing you can do.  We have successfully helped more than 1,000 homeowners with a real estate short sale.  With a short sale, you can be proactive and:

  • Save your credit

  • Pay absolutely NOTHING to sell your home

  • Satisfy your lender, and have no deficiency

  • Relieve your debt

  • Get a fresh start


Banks make the decision to foreclose. YOU make the decision to short sale.

If you suffer from financial hardship, you may be able to short sale your property and get immediate financial relief. You can avoid crippling your credit rating for the next 10 years. A successful short sale means the bank will write off your debt and stop hassling you for payments.

We are experts at short selling properties (and we have a 95% success rate closing over 1000 short sales since 2007). We will work with you to find a buyer, negotiate with your bank and close the deal so you can walk away debt-free.


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925 B Street Suite 102
San Diego CA, 92101
Phone: (888) 746-7820
Fax: (888) 597-2040

Short Sale Expert

Encore Real Estate Group
CA DRE Lic. #01883210

Broker: Troy Anthony Huerta
Agent: Leon Cook
CA DRE Lic: #01028204
CA DRE Lic: #01866021

925 B Street Suite 102
San Diego, CA 92101

Phone: 1-888-746-7820