What Is A Short Sale?

If you need to sell your Las Vegas property and you more on your mortgage than it will appraise for, then a Short Sale transaction is an option that might be accepted by your bank in an effort to avoid foreclosure.

A short sale is a real estate transaction where a homeowner is facing a hardship and gets permission from a bank to sell their property for less than they owe on the mortgage.

While it is generally beneficial for a bank to grant an approval on a short sale in order to avoid an expensive and time consuming foreclosure, the seller generally must prove a hardship.

Types of Hardships

Banks consider three main factors when determining whether or not a seller qualifies for a Short Sale:

Financial Hardship:

A financial hardship is defined as something that has changed in your the borrower’s financial situation between now and the time they originally obtained the home loan that is making it difficult to continue paying the monthly mortgage payments.

Possible Examples:

  • Divorce
  • Unemployment
  • Death In Family
  • Illness
  • Job Transfer
  • Medical Emergency
  • Increase In Mortgage Payment

Monthly Shortfall:

A monthly shortfall is a budget that shows it is impossible for a borrower to continue meeting their monthly mortgage obligations due to the financial hardship.

For Example, if a borrower’s monthly income is $4,000, yet their total monthly obligations are $6,500.


As it relates to a Short Sale approval, insolvency is basically when a borrower does not have enough liquid funds available to pay down the balance of their mortgage in order to sell their home.

This is obviously where it is beneficial to have the guidance of a specialized real estate attorney, Certified Public Accountant and Financial Planner, which Shelter has referrals to on demand.