Sell Your House in a Short Sale — We Buy Short Sales and Wait Out the Bank

A short sale with us takes four steps. You make one call to start. We take it from there and keep you posted at each step, from the first offer to the closing table.

Step 1: Tell Us About the House and the Loan

Call us or fill out the form. Give us the address, roughly what you owe, and who holds the loan. Tell us if a sale date is set. It's fine if you don't know every number yet. A recent mortgage statement fills in the gaps.

Step 2: Get Our Cash Offer in Writing

We look at the house as it sits. You don't fix, clean or stage anything. We put our price in a written contract. The contract says the sale needs your lender's okay, because the price is less than the payoff.

Step 3: Your Lender Reviews the Short Sale

Your lender will ask you for proof of your hardship and some financial papers. It also orders its own value on the house. We send our offer to the lender and follow up until we get an answer. You can keep living there while you wait.

How Long the Bank Review Takes

Plan on six months to a year for the bank's review. That has been the usual range in our files. FHA, VA, Fannie Mae and Freddie Mac each have their own steps. A second loan adds a second lender to the line. We wait it out with you.

Step 4: Close and Move On

Once the lender approves in writing, we set the closing with a title company. Our price pays the approved payoff. The lender releases its lien, and you hand over the keys. Anything you might still owe is spelled out in the approval letter, so read it before you sign.

A short sale fits a homeowner whose house is worth less than what's owed and who can't keep up. It works across the common loan types. Each one has its own rules, so here's the short version of each.

FHA Loans: HUD's Pre-Foreclosure Sale

HUD, the U.S. Department of Housing and Urban Development, calls an FHA short sale a Pre-Foreclosure Sale. Once your lender approves you to take part, you have four months to get a signed contract. You'll need a licensed real estate agent to list the house. The list price can't be below the as-is appraised value. (HUD Handbook 4000.1, Pre-Foreclosure Sale.)

VA Loans: The VA Short Sale

VA allows a short sale when there's little or no equity. The servicer agrees to release its lien in exchange for the money from the sale. If you're 60 or more days behind and ask for a short sale, the servicer doesn't have to review your finances first. You can't take any of the sale money yourself. (VA Servicer Handbook M26-4, section 5.08.)

Conventional Loans: Fannie Mae and Freddie Mac

If Fannie Mae or Freddie Mac owns your loan, their servicing guides set the rules. The servicer orders its own value on the house and reviews your hardship and finances. Not sure who owns your loan? Ask your servicer in writing. Federal law says it has to tell you. (Fannie Mae Servicing Guide D2-3.3-01; Freddie Mac Guide 9208; 15 U.S.C. 1641(f)(2).)

Second Loans and Other Liens

A second mortgage or home equity loan needs its own release. On Fannie Mae and Freddie Mac short sales, the first lender can pay second lien holders up to $6,000 in total. It only pays if they release the lien and release you from the debt. (Fannie Mae D2-3.3-01; Freddie Mac 9208.2(c)(iii).)

Judgments and HOA liens can't be paid from that money. On FHA loans, the lender pulls a title search before it approves you, so those liens show up early. We work those payoffs as part of our purchase. (HUD Handbook 4000.1.)

When a Sale Date Is Coming

Texas foreclosures are sold on the first Tuesday of the month. A short sale can still close before then if the lender approves in time. So start now, not the week before. Here's how to sell your house in foreclosure in Dallas, with each Texas notice and deadline laid out.

The 37-Day Rule for the Home You Live In

Federal servicing rules can buy you time. Say your servicer gets a complete loss mitigation application more than 37 days before the sale. Then it can't hold the sale until it rules on your application, with a few exceptions. This rule covers your main home only. (12 CFR 1024.41(g) and 1024.30(c)(2).) This is general information, not legal advice.

Here's where the money goes in a short sale. It covers what you pay us, what comes out of the sale, and the one case where a lender can ask you to chip in.

What You Pay As-Is Home Buyer

Nothing. We don't charge for our services, and we don't take a commission. We don't bill you for handling the bank on the house we buy. FHA's rules bar the lender and its vendors from charging you a fee to take part. Freddie Mac bars fees to you for processing a short sale, too. (HUD Handbook 4000.1; Freddie Mac Guide 9208.2(c)(vi).)

Who Pays Closing Costs and the Agent's Commission

The lender approves a settlement statement before closing. Your normal seller costs come out of the sale price. That covers:

• title charges
• prorated property taxes
• past-due HOA dues
• the listing agent's real estate commission

The lender lists each cost it allows, and you don't write a check for them. (HUD 4000.1; Fannie Mae D2-3.3-01; Freddie Mac 9208.2(c).)

When the Lender Asks You to Chip In

Here's the one catch. On Fannie Mae and Freddie Mac loans, the servicer may ask for a cash contribution if you have savings. The trigger is more than $10,000 in non-retirement cash, or a housing payment that's low next to your income. It's the lender's ask, not ours. Both guides let the servicer ask for less, or for nothing, based on your situation. (Fannie Mae D2-3.3-01; Freddie Mac 9208.1(d).)

Moving Money Some Loans Pay

Some loan programs pay you to move. None of it comes from us, and none of it is promised until the approval letter says so. Here's what each program allows.

FHA: Up to $3,000

HUD can pay up to $3,000 to an FHA borrower who lives in the house, acts in good faith and completes the sale. It can go toward moving, toward other liens, or toward sale costs HUD doesn't pay. (HUD Handbook 4000.1.)

Fannie Mae and Freddie Mac: Up to $7,500

Both pay up to $7,500 when the house is your main home and you aren't asked to make a cash contribution. Other moving help, like money from an employer, can reduce it. (Fannie Mae D2-3.3-01; Freddie Mac 9208.1(d)(ii).)

VA: A $1,500 Advance

VA lets servicers advance $1,500 in moving help to borrowers who live in the house and complete a short sale. VA then pays the servicer back through its claim. (VA Servicer Handbook M26-4, section 5.10.)

Will You Still Owe the Bank After a Short Sale?

It depends on the loan and the approval letter. HUD's rules say the lender must satisfy the FHA mortgage debt once it gets the agreed proceeds. Fannie Mae requires a deficiency waiver on loans without mortgage insurance, and on some with it. Freddie Mac won't pursue the rest of the debt if you acted in good faith. Read the release terms before you sign. (HUD 4000.1; Fannie Mae D2-3.3-01; Freddie Mac 9208.3(a)(vi).) This is general information, not legal or tax advice.

You list the house. We buy it. As-Is Home Buyer is the cash buyer on the contract, not another real estate agent. We don't take listings, and we don't ask for a cut of your pay. We buy short sales across Dallas-Fort Worth.

You Keep the Listing and Your Commission

Your listing agreement stays yours, and so does your commission. It's paid from the sale at closing, on the settlement statement the lender approves. We don't pay referral fees or side money to anyone. Every dollar in the deal shows on that statement, the way the lender's rules require.

Loop Us In Before You List

Call us before the listing goes live. You set the list price and the MLS remarks with your seller. Knowing our offer early lets the price, the remarks and the contract fit the lender rules listed here from the start. Then our offer is ready on the first day those rules allow offers, and the file moves on day one.

List Price Rules the Lender Checks

FHA sets a floor: the house can't list below its as-is appraised value. Fannie Mae and Freddie Mac servicers may give list price guidance, but it's only guidance. An offer at that price still may not be approved. The price has to hold up against the lender's own value. (HUD 4000.1; Fannie Mae D2-3.3-01; Freddie Mac 9208.2(a)(iii).)

FHA Listing Steps

HUD wants a licensed agent hired within seven days of the seller's approval to take part. The listing agreement must carry HUD's cancellation clause. The house stays on the MLS for at least 15 days before offers are reviewed. (HUD Handbook 4000.1, Pre-Foreclosure Sale.)

Fannie Mae Listing Steps

The house must be listed with a licensed agent who isn't a borrower on the loan. It has to show as active on the MLS for at least five days in a row, including a Saturday and a Sunday. Only then does the servicer send the offer up for approval. (Fannie Mae Servicing Guide D2-3.3-01.)

Contract Clauses Fannie Mae Expects

The sales contract has to say the sale depends on the mortgage holder's okay, and the mortgage insurer's if there is one. It also needs a clause that makes the seller's duty to close subject to their rights. We write both into our offer.

What to Send Us

Four things get us started on a Dallas-Fort Worth short sale:

• the property address
• roughly what's owed on each loan
• the loan type: FHA, VA, conventional or other
• any foreclosure sale date

A recent mortgage statement helps, but you don't need it for the first call.

How to Reach Us

Call us at (945) 207-4164. Or use the form on this page: type the property address in the Address box, then add the word "agent." That tells us a listing agent sent it, and we'll call you back about the file.

A short sale is a sale where the lender agrees to take less than the full payoff. The price falls short of what you owe, so the lender has to approve it in writing. Without that approval, the lien stays on the house and the sale can't close.

Why would a lender say yes? A sale can cost it less than a foreclosure. The lender orders its own value on the house first. FHA, VA, Fannie Mae and Freddie Mac each set a floor for what the sale has to net. VA's rules say a short sale fits when there's little or no equity. If your house has equity, you likely don't need a short sale at all. We'd simply buy it for cash. (VA Servicer Handbook M26-4, section 5.08.)

Not always. On Fannie Mae loans, a servicer can review you while you're current or less than 60 days late. It first has to find that you're in imminent default, which means a real payment problem is coming. Freddie Mac runs its own imminent default test, too.

Being further behind can make the paperwork lighter. On a VA loan, if you're 60 or more days behind and ask for a short sale, the servicer doesn't have to review your income and expenses first. Fannie Mae skips the full package in some cases once you're 90 days late. Each file is different, and your servicer sets the list of what it needs. (Fannie Mae D2-3.3-01; Freddie Mac 9208.1; VA M26-4, section 5.08.) This is general information, not legal or tax advice.

On Fannie Mae and Freddie Mac loans, expect Form 710, the Mortgage Assistance Application. It comes with proof of income and proof of your hardship, such as a job loss, a divorce or medical bills. On Fannie Mae files, income papers can't be more than 90 days old. The servicer may also ask you to sign an IRS form so it can check your tax return.

The lender will need to get inside the house for its value, too. Fannie Mae's guide says the servicer must tell you to allow that visit, and Freddie Mac asks for an interior look. The servicer can also use an outside vendor to check the income and asset numbers you give it. We keep the offer side moving while you work on your part. (Fannie Mae D2-2-05 and D2-3.3-01; Freddie Mac 9208.2.)

You get an approval letter. It lists the payoff the lender will take, the costs it allows, and a closing deadline. On a Fannie Mae loan, the sale has to close within 60 days of approval unless the servicer gets an extension in writing. Read the letter closely, including any line about what you still owe.

Then we set the closing with a title company. The title company pays the approved costs from the sale and sends the payoff to the lender. The lender releases its lien. You sign, hand over the keys and move on. If the letter has a mistake, like a wrong date or a wrong price, it gets fixed before closing, not after. (Fannie Mae Servicing Guide D2-3.3-01.)

Yes. It's still your house until closing, so you can live there. You also stay on the hook for upkeep until the sale closes, and Fannie Mae's guide says servicers must tell you that. Keep the lawn cut, the utilities on and the doors locked. A house left to fall apart can drag down the lender's value.

One warning matters here. Listing the house or sending an offer doesn't stop a foreclosure on its own. Fannie Mae's guide says a listing may not delay the start of foreclosure. Keep reading every letter from your servicer, and send us any notice of sale the day it arrives. (Fannie Mae Servicing Guide D2-3.3-01.) This is general information, not legal advice.

You might. When a lender cancels part of a mortgage debt, IRS rules can require it to send you a Form 1099-C. Fannie Mae's guide tells its servicers to file that form when debt is canceled. It also tells them to warn you about possible tax effects and to point you to IRS Publication 544.

Whether you owe tax depends on your own facts. Your other debts and assets can change the answer. We're a home buyer, not a tax advisor, so talk to a CPA or tax preparer before you close. Ask them to look at the approval letter and the payoff numbers with you. (Fannie Mae Servicing Guide D2-3.3-01 and its IRS reporting rules.) This is general information, not legal or tax advice.

We buy houses as they sit, so repairs don't stop us. You don't fix, clean or empty anything for our offer. The lender's value will reflect the house's real shape, and so will our price.

FHA has a few extra rules. A house that is condemned, or that the lender finds abandoned, can't use HUD's Pre-Foreclosure Sale. Fire, flood or storm damage may need a HUD sign-off before the lender approves. If there's an insurance claim, the lender works with you on it. The money either fixes the house or lowers what HUD pays on its claim. Tell us about any damage up front, so nothing surprises the lender later. (HUD Handbook 4000.1, Pre-Foreclosure Sale.)

A counteroffer isn't a no. It names a price the lender will take. Freddie Mac gives you five business days to answer it. Then the servicer has ten business days to respond. Fannie Mae uses the same windows for its counters and revised offers. We look at every counter and tell you if we can meet it.

If the lender declines, the file isn't always over. A new offer or fresh numbers can reopen it. If a short sale can't work at all, HUD's rules send an FHA lender back to other options, like a deed in lieu of foreclosure. On an FHA file, the lender reviews whether you can catch up first. (Freddie Mac 9208.2(b); Fannie Mae D2-3.3-01; HUD Handbook 4000.1.)

Not by itself. HUD's rules let the lender cancel or pause a foreclosure only where state law allows it. But two rules can help. Say you have a signed contract that hasn't closed by the end of the four-month marketing window. HUD then adds an automatic two-month extension to the deadline to start foreclosure.

Also, a lender can't start a new four-month marketing period once the first legal step to foreclose has happened. If it gets an acceptable contract after that point, it gives only the time needed to close by the contract's closing date. That's why timing matters so much on FHA files. Call us as soon as you get a default letter. (HUD Handbook 4000.1, Pre-Foreclosure Sale.) This is general information, not legal advice.

No. We don't pay referral fees, marketing fees or side money on any short sale. Your pay is your commission, paid at closing on the settlement statement the lender approves. That keeps the deal clean for you and for your seller, and it keeps every number where the lender can see it.

The lender's rules point the same way. Freddie Mac's short sale affidavit is signed by the buyer, the seller, the agents and the closing agent. It says every amount paid to any party was disclosed to the servicer and approved. It also says each one shows on the settlement statement. A payment kept off that statement is a problem for everyone who signs. (Freddie Mac Guide 9208.2(c)(viii).)

It shouldn't cut an agreed, customary commission. Freddie Mac's guide bars the servicer from making a lower commission a condition of approval, unless the commission is above Freddie Mac's cap. FHA and Fannie Mae allow a commission that's customary for the market, up to their own caps. (Freddie Mac 9208.2(c)(v); HUD Handbook 4000.1; Fannie Mae D2-3.3-01.)

The commission is paid from the sale, so it comes out of the lender's net. On a tight file, every cost on the statement gets weighed against the lender's floor. Talk to us before you set the listing terms. We'll tell you how the numbers look from the buyer's side, and you set your fee with your seller.

Yes. We're an unrelated buyer, and we sign what the lender requires. Fannie Mae uses a Short Sale Affidavit, Form 191. Freddie Mac has its own affidavit, signed under penalty of perjury. FHA uses a PFS Addendum signed by the buyer, the seller and both agents.

Those papers say the sale is at arm's length. That means no family or business ties and no hidden deals. There's no plan for the seller to rent the house back long term or buy it back later. Freddie Mac allows a short stay of up to 90 days only to help with a move. We won't sign anything that isn't true, and we won't ask you to. (Fannie Mae D2-3.3-01; Freddie Mac 9208.2(c)(viii); HUD Handbook 4000.1.)

Yes. Send our offer up like any other. On an FHA sale, the listing agent has to pass along the offer with the highest net to HUD that also meets HUD's contract rules. Offers have to be signed by both the seller and the buyer first. Backup offers the seller wants to hold stay on file until the lender decides. (HUD Handbook 4000.1.)

On Freddie Mac files, the affidavit says every offer was presented to the seller. None can be held back or hidden. So our offer competes on price and terms, in the open. If another offer wins, we'll stay on as a backup if you want one. (Freddie Mac 9208.2(c)(viii).)

We start with the house as it sits and recent sales nearby. Then we figure repairs, holding time and the cost to resell. That gives us our cash price. We don't promise a number before we see the house and the loan facts.

The lender runs its own numbers. FHA uses an as-is appraisal. Fannie Mae and Freddie Mac get their own value, and Freddie Mac sets a minimum net that the servicer may not share. So a strong offer has to meet the lender's floor, not just our math. If the gap is small, a cleaner cost list can close it. We'll show you how our offer nets out. (HUD Handbook 4000.1; Fannie Mae D2-3.3-01; Freddie Mac 9208.2.)

A contract signed by both sides comes first. On FHA files, the offer has to be signed by the seller and the buyer before it goes to the lender. The PFS Addendum needs every signature except the closing agent's. On Fannie Mae files, the servicer will point you to HomePath for Short Sales to register the offer.

After that, we need the seller's hardship package moving and the lender's contact on the file. We'll handle our side: proof of funds, signed addenda and fast answers to the lender. You handle the listing side and keep the seller's papers flowing. Send us every lender letter the day it lands. (HUD Handbook 4000.1; Fannie Mae Servicing Guide D2-3.3-01.)