When a homeowner falls behind on payments and the mortgage balance is higher than the actual value of the home, a traditional sale won’t work. In situations like this, a short sale can be a powerful tool to avoid foreclosure and get a clean exit — even when equity doesn’t exist.
This guide walks you through what a short sale is, how it works, why lenders approve them, and whether it may be the right option for your situation.
A short sale happens when your lender agrees to let you sell your home for less than what you owe on the mortgage. The bank accepts the loss, releases the lien, and allows the property to transfer to a new buyer.
Homeowners in San Antonio typically choose this option when:
• They owe more than the home is worth
• They are behind on payments
• Foreclosure is approaching
• Major repairs make a full-price sale impossible
• They want to avoid a foreclosure on their credit
A short sale requires lender approval and documentation, so it’s not instant — but when done correctly, it’s one of the cleanest ways to walk away from a negative equity situation.
A short sale prevents a full foreclosure from hitting your credit report, which protects your ability to buy or rent in the future.
Many lenders forgive the remaining mortgage balance after the sale, depending on the loan type and hardship.
A short sale is still a negative event, but it is far less damaging than a foreclosure or bankruptcy.
You do not pay realtor commissions, closing costs, or repairs. Everything is handled within the approved sale.
Homeowners can often qualify to buy another home much faster after a short sale compared to a foreclosure.
Banks may take 30–120+ days to approve the sale, depending on the lender.
Because there is no equity, the seller does not receive cash from the sale unless the lender specifically approves a relocation credit.
You’ll need to show the lender that you truly cannot afford the home and that a short sale is the only realistic solution.
Even with a buyer lined up, the lender can reject the offer or request a higher amount.
A short sale is a strong choice if:
• You owe more than your home is worth
• You are behind on payments
• You don’t want a foreclosure on your credit
• Repairs are too expensive to handle
• You need a dignified exit and a fresh start
It is not the best option if:
• You have equity
• You need to move extremely fast
• You aren’t comfortable sharing financial documents with your lender
Short sales require patience and the right guidance — but for the right homeowner, they can turn a hopeless situation into a controlled, respectful exit. If you’re unsure whether this is the right option for your home, we can walk you through the process and help determine the best strategy for your timeline and financial goals.
For more information about your unique situation please call or text us at 210-570-4787