Not all short sales get approved. This guide breaks down the most common reasons lenders deny short sales — and what homeowners can do to improve their chances of success.
Top Mistakes Homeowners Make During a Short Sale (And How to Avoid Them)
Avoiding common mistakes during a short sale can make the difference between a smooth process and unnecessary stress. Here's what homeowners should watch out for.
Why Agents Should Market Short Sales Differently Than Traditional Listings
Short sales require more than just standard real estate marketing. This post outlines key strategies agents should adopt to attract the right buyers, manage expectations, and guide the transaction to closing successfully.
The Short Sale Hardship Letter: What to Say and What to Avoid
If you're considering a short sale, one of the most important documents you'll submit to your lender is the hardship letter. It’s not just paperwork—this letter plays a major role in getting your short sale approved. In this post, we'll walk you through what to say, what to leave out, and why this letter can make or break your short sale case.
What Is a Hardship Letter?
A hardship letter is a personal statement explaining why you can no longer afford your mortgage. It's submitted as part of your short sale package and gives your lender context for your financial struggles. The goal? Show that your hardship is real, ongoing, and serious enough to warrant the bank forgiving a portion of what you owe.
Common hardships include:
> Job loss or reduced income
> Medical expenses
> Divorce or separation
> Death of a primary wage earner
> Relocation for work
> Rising living expenses that outpace income
> It should be honest, concise, and fact-based—not overly emotional or defensive.
Consumer Finance has a guide
How to Structure a Strong Hardship Letter
Here’s a basic structure to follow:
> Introduction
State your name, property address, and loan number. Clearly say you're requesting a short sale due to financial hardship.
> Explanation of the Hardship
Be clear and specific. Mention what changed in your life that impacted your ability to pay.
> Financial Impact
Briefly explain how the hardship has affected your income or budget. You can reference supporting documents like pay stubs, medical bills, or bank statements.
> Efforts to Resolve
Let them know you’ve tried to stay afloat—cutting costs, seeking work, modifying the loan, etc.—but it’s no longer sustainable.
> Request for Short Sale
Politely ask for their approval of a short sale to avoid foreclosure, protect your credit further, and resolve the loan responsibly.
> Closing
Thank them for their time and consideration.
What to Avoid Saying in Your Hardship Letter
Your lender isn’t looking for blame, anger, or long-winded explanations. Here’s what to leave out:
> “I deserve forgiveness”
This isn’t about what’s fair—it’s about what’s factual.
> Blaming the bank or others
Keep it focused on your situation, not finger-pointing.
> Over-sharing or too much emotion
The story should be compelling but professional.
> Promises you can’t keep
Avoid saying things like “I’ll pay it all back eventually” if that’s unlikely.
Final Tips
> Keep it under one page
> Use simple language
> Have someone else proofread it
> Include documentation to back up your story
If you’re not sure where to start, we can help. Our team works with homeowners every day to craft hardship letters that strike the right tone and meet lender requirements.
You can learn more about the full process on our Short Sale Stages page.
When Is the Right Time to Consider a Short Sale?
Timing is everything when it comes to short sales. If you're falling behind on payments or facing long-term financial strain, understanding when to act can make the difference between a manageable exit and foreclosure. Here’s what to consider before making your move.
How to Navigate a Short Sale with Multiple Mortgages
Handling a short sale is already complex—but add multiple mortgages to the mix, and it can feel overwhelming. This guide explains how homeowners and agents can move through the short sale process when more than one lender is involved.
Can You Do a Short Sale with Multiple Mortgages?
Wondering if you can short sell a property with more than one mortgage? It’s absolutely possible—but it’s not always simple. Learn how second mortgages and lienholders affect the process and what you can do to prepare.
Short Sales and Divorce: What Happens to the House?
Going through a divorce and facing an upside-down mortgage? Learn how a short sale can help both parties move forward, what to expect, and how to avoid legal and financial headaches.
How to Get Your Short Sale Approved Faster
A short sale can be a great alternative to foreclosure, but it requires patience and the right approach. Understanding what lenders look for and avoiding common mistakes can significantly speed up the process. This guide walks homeowners and real estate agents through the best strategies to get short sale approval faster.
The Biggest Short Sale Myths Debunked
Short sales can be a powerful alternative to foreclosure, but misinformation often prevents homeowners from considering this option. In this article, we’ll debunk the most common short sale myths and provide the facts you need to make an informed decision.
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