Foreclosure sale already scheduled
The listing won't stop it; get any postponement in writing.
SHORT SALES · LISTING AGENT GUIDE
Took a short sale listing? Start here.
Figure out the loan type, follow the steps, and check the numbers.
Start here
Think you have a short sale? Do this first
- 1
Confirm it's short — the loan payoff plus selling costs is more than the home will sell for.
- 2
Get the seller's signed third-party authorization, then call the servicer's loss mitigation department.
- 3
Open title early — Chicago Title will find every lien (second mortgage, HELOC, HOA, judgments).
- 4
Find out the loan type — then follow the flowchart below.
Already have a foreclosure sale date? A listing doesn't stop it — see the Foreclosures page.
Choose your path
What type of loan is it?
What type of loan is it?
Not sure? Check the closing docs, ask the servicer “who is the investor?”, or use the Fannie Mae lookup and Freddie Mac lookup.
VA short sale
- 1Call loss mitigation — home retention review first
- 2Servicer orders the VA liquidation appraisal — meet the appraiser
- 3Required net = appraisal × 84.05%
- 4Clear second liens and other liens
- 5Get written approval
- 6Close by the deadline
$400,000 appraisal → $336,200 net
FHA Pre-Foreclosure Sale
- 1Seller applies — servicer runs the HUD waterfall first
- 2Seller must be 61+ days late and not eligible to keep the home
- 3FHA appraisal sets the as-is value
- 4Approval to Participate (HUD-90045) — sign within 10 days
- 5List within 7 days at or above the as-is value
- 6Four-month window: 88% days 1–30 → 86% days 31–60 → 84% last 60 days
- 7Lender approves the contract
- 8Close — or Deed-in-Lieu / foreclosure if no contract meets the deadline
HUD loss mitigation waterfall
Tier 1 · Repayment plan · Forbearance
Tier 2 · Partial claim · Loan mod · Combination · Payment supplement
Tier 3 · Short sale (PFS) → Deed-in-Lieu
Bottom · Foreclosure (Public Trustee)
$400,000 as-is → $352,000 / $344,000 / $336,000
Conventional short sale
- 1Identify the investor — Fannie, Freddie, or portfolio
- 2Submit the hardship package
- 3Investor orders a BPO or appraisal and sets the required net
- 4Negotiate second liens and PMI
- 5Get written approval — confirm deficiency is waived in writing
- 6Close
Other / Not sure
- 1Call the servicer
- 2Ask: “Who is the investor and what are your short sale requirements?”
- 3Follow the matching path
Check the numbers
Net proceeds calculator
The lender needs at least
$336,200
$400,000 × 84.05%
Will an offer work?
Estimated net to lender
$368,000
Planning estimate only — the servicer's number controls.
Before you proceed
Red flags & things to consider
Multiple liens
Seconds, HELOCs, HOA, and judgments all have to agree to release.
Seller expects cash at closing
Usually not allowed in a short sale.
Buyer or anyone asking for side money
Walk away.
Price won't clear the lender's net
Use the calculator before you list.
Seller isn't ready for the timeline
Approvals commonly take 60–120+ days.
Deficiency and taxes
Seller should talk to an attorney and a CPA before closing.
VA loan that isn't actually underwater
An assumption may be a better fit; call Ben.
Educational only. Program rules change and servicers can set stricter requirements — confirm every number with the servicer.
Sources
- Federal Register — VA Net Value Percentage Update (15.95%)
- VA Servicer Handbook M26-4
- HUD Mortgagee Letter 2025-12
- Fannie Mae Servicing Guide D2-3.3-01
- El Paso County Public Trustee
- Arapahoe County Public Trustee foreclosure timeline
- HUD Approval to Participate form HUD-90045
Last reviewed: September 2026