What Does “Short Sale Method” Mean?
The short sale method is a strategy used by homeowners who owe more on their mortgage than their property is worth—and can no longer afford to keep up with payments. In a short sale, the home is sold at market value, even if that amount is less than the mortgage balance. The lender agrees to accept the proceeds in exchange for releasing the lien on the property.

It's a method used to prevent foreclosure, reduce financial fallout, and provide a more dignified exit from a tough financial situation.

Why Lenders Agree to Short Sales
It might seem surprising that a lender would accept less money than what they’re owed. But here's the reasoning behind it:

> Foreclosures are expensive and time-consuming for banks.
> A short sale often leads to higher recovery rates than foreclosure.
> It allows for faster resolution of non-performing loans.
> It reduces the chance of the home becoming abandoned or damaged during foreclosure.

This makes short sales a practical method for both the homeowner and the lender.

Want to learn how this compares to foreclosure? Read our guide on Short Sale vs. Foreclosure.

Key Elements of the Short Sale Method
To qualify for this method, you’ll typically need:

> A documented financial hardship (such as job loss, divorce, medical bills)
> A home that’s underwater (worth less than what’s owed)
> No feasible way to catch up on mortgage payments
> A buyer willing to purchase the home at current market value

You’ll also need a short sale package including a hardship letter, financial documents, and a market analysis. For a full breakdown of the required documents, see our Short Sale Stages.

Benefits of the Short Sale Method for Homeowners
Compared to foreclosure or bankruptcy, the short sale method offers some real advantages:

> Less credit damage than foreclosure
> Ability to recover financially sooner
> Greater control over the timing and process
> Possibility of relocation assistance or moving incentives

For more on how a short sale affects your credit, visit our page on Short Sale Credit Impact.

When Should You Consider This Method?
You should consider a short sale if:

> You’ve fallen behind on payments or will soon
> Selling the home at market value won’t cover your loan
> You want to avoid foreclosure and take a more cooperative path with your lender
> You're prepared to submit documentation and work with professionals

Need help determining if this method fits your situation? Talk to our team today for expert guidance.

Summary
The short sale method is a cooperative solution that helps struggling homeowners get out from under mortgage debt. By working with your lender to sell the property for less than what’s owed, you avoid foreclosure, reduce credit damage, and potentially walk away with a fresh start.

It’s not the right option for everyone—but for many, it’s the best path forward.