Stacey-Ann's Blog


Caution: Moving Out Of Your Home In a Short Sale May Cost You Tens Of Thousands Of Dollars


Important information about a short sale.


This is a little known fact and an alarming truth. There is a natural tendency to flee the house ahead of the foreclosure storm. However, vacating the house may invalidate the seller’s eligibility to have the shortfall on their debt wiped out forever.

OK, so what does that mean?

Step by step:

  1. A short sale happens when the lender allows the seller to sell the house for an amount short of the amount owed.
  2. The difference between the total amount owed and what the lender gets when the house sells is called “shortage”, “shortfall” or “deficiency”.
  3. In an ideal short sale, the lender forgives the deficiency and the seller never has to pay it back.
  4. Sometimes the lender demands the seller stay obligated on the deficiency. The deficiency could be tens of thousands or even hundreds of thousands of dollars.
  5. Some government or government sponsored short sale programs require the lender to forgive the deficiency.

Here is the vital point:

Some of the programs require the seller to be living in the home all the way up to the approval of the short sale. Moving out could cause the seller to lose their eligibilty to have their entire shortage wiped out. Staying in the house could save the seller $10,000's of debt forgiven forever.

There are many different lenders, with many different rules and regulations. These rules change all the time, so listing the rules here could be impossible and would probably be obsolete by the time you read this. At current writing prime examples are FHA and HAFA.

Always Consult a Short Sale Realtor Who Stays Current on the Latest Rules

Therefore, if you are a candidate for a short sale or were served a foreclosure notice by the sheriff or by certified mail – do not abandon your home until you call a real estate agent who specializes in short sales.

You should also consult an attorney, but keep in mind that many attorneys are not experts in the benefits of short sales.  Have your lawyer check the latest short sale developments with your short sale Realtor expert.

If in Louisville, Call Dave Halpern, Real Estate Broker, Louisville Short Sale Expert Realtors (502) 664-7827

Dave Halpern

Broker, Louisville Short Sale Expert Realtors

(502) 664-7827

If you or someone you know would like information about buying, selling, or renting a home in Prince George's, Montgomery,  Charles, Calvert, Anne Arundel, Howard, and/or Baltimore Counties please contact Dr. Stacey-Ann Baugh of Century 21 New Millennium.


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Donations made to charity with every successful closing!

Dr. Stacey-Ann Baugh

Century 21 New Millennium

240-481-3565 (C)

202-546-0055 (O)




Information deemed reliable but not guaranteed! 




Comment balloon 2 commentsDr. Stacey-Ann Baugh • August 27 2010 11:58AM


Great information. I view a lot of short sales that are not only vacant, but destroyed. Good blog to reblog

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) about 8 years ago


Thanks for the reblog. The more we get the word out the better.

Since you're a psychologist, I wonder what your take is on counseling elderly who are losing their home to foreclosure or have to leave due to a short sale. Please see my post at:

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) about 8 years ago

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