Dagny Eason, Fairfield County's Real Estate Blog: FAQ's About Short Sale - What You Need to Know! What You Need to Do!

FAQ's About Short Sale - What You Need to Know! What You Need to Do!

A Few Questions and Answers About Short Sales and How to Minimize Credit Impact


           Certified Depressed Properties Expert CDPE Dagny Eason short sale


Back in February, I wrote a blog about short sales and using a Certified Depressed Properties Expert (CDPE) to assist with the transaction.  I received great feedback on that information and I wanted to continue the conversation by giving you a list of FAQ's and their answers regarding short sale.


                                                                   Certified Depressed Properties Expert CDPE designation Dagny Eason


It all begins with:


"I am having financial difficulty.  Should I stop paying my mortgage?"



That's a very subjective question.  Let me ask you some inquiring questions in return.


  • How long can you continue to pay your mortgage and your living expenses before something has to give?
  • Do you have a lot of debt (credit cards, car payments, doctors bills, etc.)?
  • Do you have a source of income - ie. retirement account, rainy day savings, access to home equity line of credit, that you can access short term to help you through this?
  • Have you done everything you can to cut your living expenses back before you think about not paying your mortgage?


                                  Dagny Eason short sale blog foreclosure advice Wilton CT


OK - so you see it's complicated.  None of my answers will be cut and dry.  Everyone's situation is unique and I am not a lawyer, but I am a Realtor who has been through the process many times over on both ends of the spectrum, with Sellers and Buyers.  Plus, I'm a Certified Depressed Properties Expert so I think I speak from experience when I give you my two cents.


Ideally, no one wants to sell their property as a short sale, so if you can access a source of income to get you through this troublesome time, that would be best.  However, you don't want to get further into debt (especially credit card debt) that you cannot dig out of once your financial situation turns around.  So word of caution, do not overextend on credit.  That will not help!




Take a good, hard look at your finances and make a list of all your monthly expenses and another of total amounts owed.  From there, you can answer just how long you have to meet those expenses until your source of income runs dry.  If you can, make cuts to your expenses' list.  Drop the extra cable channels, sell that car you use only during the summer, stop using a lawn person or find someone cheaper, increase your deductibles on your insurances, adhere to a strict grocery budget each week... It's worth a call to your cable company and your home alarm company to see what they can do for you to cut those bills.  In so many instances, all you have to do is ask!



Next question I get is:


"If I stop making mortgage payments, do I automatically go into foreclosure?


You have to consult your lending documents, but most likely if you stop paying your mortgage, the bank has the right to call in your loan and possibly evict you from the property.  BUT, that is not what you are going to do!  Before you decide that it is time to stop paying your mortgage, get a consultation with an attorney who specializes in foreclosures and short sales.  A 45 minute consult for $some could save you much heartache and you will arm yourself with knowledge and possibly find another option.  For instance, perhaps your lender will agree to modify your loan so you won't have to sell.  Or maybe they will move the next two payments due to the end of the loan period to give you two months of breathing room.  Lawyers are paid to do this kind of negotiating and come up with options.  I can recommend a lawyer to you if you ask.



A lawyer can work with you and your lender to keep things amicable if you need to default on your mortgage.  Along with your lawyer, you can decide if there is urgency to get out of your property or if you might be able to stay for a length of time while it sells without paying the mortgage.  Working with a lawyer, who works with your lender, will keep you out of foreclosure for the time being.  Remember, foreclosure is different from short sale.  If you need a refresher on the differences, please review my blog from Feb. 28th entitled "Using a Certified Depressed Properties Expert Can Save You More Grief!"


How badly will my credit be affected due to a short sale?


Part of the answer to this question may depend upon how your credit was before your financial troubles began.  There's no sure way to tell what the adverse effects will be and for how long.  Generally, if you have never been late on a payment on your credit cards, car payments, student loans, doctors bills, vendors who do work for you, etc, your credit score will decrease due to a short sale but it won't be as much had you missed payments. 


Real Estate Questions


It's been my experience that a lawyer will tell you to keep paying your bills - other than your mortgage - if you are going to do a short sale.  That way, you will keep your credit rating somewhat intact.  You are going to need a place to live after you sell.  Unless you are paying cash - and you won't be able to obtain a mortgage for some time - so you will need to rent.  In order to be able to get a rental you will need to have some kind of credit rating.  No one wants to rent to someone who may not pay them!  If you have a history of not paying bills, chances are you won't pay your rent.  So keep up with your other payments!


                             Dagny Eason realtor real estate short sale foreclosure


A point to keep in mind, make sure you understand the terms of how your mortgage loan will close with your bank before you agree to it.  How the bank reports it to the credit bureaus will make a difference in your credit rating.  If it is reported as "paid in full" your credit score won't be impacted as much as if it is reported as "settled for less than full balance".




I hope this helps clear up some questions on short sales.  There's alot of fear of the unknown when thinking of selling short.  Arm yourself with knowledge and ask a lot of questions!  And, use a Certified Depressed Property Expert like me, Dagny Eason,  to assist you in selling or buying a short sale or foreclosure property!  Please forward this blog on if you know someone who is struggling.  I'm happy to answer any questions.


A Few Questions and Answers About Short Sales and How to Minimize Credit Impact



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This article has been written by Dagny Eason.


Feel free to call Dagny Eason to discuss this at (203) 762-1700


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Comment balloon 23 commentsDagny Eason • April 27 2017 02:36PM


Did CDPE early on and still friends with Alex, but I am glad I have left doing short slaes behind but it was a lifesaver back then.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) about 3 years ago

Dagny- What good information for anyone who thinks they may be in this situation.  The first thing to do is contact a professional for advice...a good attorney and a knowledgeable agent. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) about 3 years ago

A well deserved feature on this post.  There are still a lot of people in Connecticut with mortgage problems and a short sale is a way to get out of the problem and have a short path to a better future

Posted by Ed Silva, Central CT Real Estate Broker Serving all equally (RE/MAX Professionals, CT 203-206-0754 ) about 3 years ago

Thanks for sharing.  Thats a good list of questions.  And the answers totally depend pn each individual. 

Posted by Mick Michaud, Your Texas Lifestyle is Here! (Distinctly Texas Lifestyle Properties, LLC Office:682/498-3107) about 3 years ago

A lot of sellers don't know the first thing about short sales, even if they think they do

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) about 3 years ago

Save for that rainy day, live before your means is not square, it is survival. Great blog post Dagny Eason on how to hang on and survive hitting the rocks of a short sale situation in life when it yanks you wildly sideways!

Posted by Andrew Mooers | 207.532.6573, Northern Maine Real Estate-Aroostook County Broker (MOOERS REALTY) about 3 years ago

Good morning Dagny Eason ,

What an excellent post so glad to see it featured. Great information for those out there facing a difficult situation. There is someone to help them and in CT and person would be you. Thanks for the facts and letting us know each case is different. There is hope at the end of the tunnel. 

Posted by Dorie Dillard CRS GRI ABR, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.750.6899) about 3 years ago

every case IS different and there are lawyer states and non lawyer states...Wisconsin is a non lawyer state and to involve one when you can't pay the mortgage is putting you in a worse state.

Posted by Sally K. & David L. Hanson, WI Real Estate Agents - Luxury - Divorce (EXP Realty 414-525-0563) about 3 years ago

This is an excellent overview of some of the thought process that should be undertaken before doing a short sale (or winding up with a foreclosure).

Posted by Kat Palmiotti, The House Kat (406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty) about 3 years ago

Great article, Dagny.  It's so great that you have a wonderful team of experts who can guide someone through this challenging and stressful process.  It all starts with a phone call.

Posted by Debbie Gartner, The Flooring Girl & Blog Stylist -Dynamo Marketers (The Flooring Girl) about 3 years ago

Good morning Dagny, short sales have improved a great deal but they remain to be complicated and each transaction is different. Working with a competent real estate agent is a must. Well deserved feature!

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) about 3 years ago

Good post, with useful information. We are not seeing so many short sales, but not everyones property values have increased to where they were so lots of sales sellers need to bring money to the table.

Posted by Nick Vandekar, 610-203-4543, Tredyffrin Easttown Realtor, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) about 3 years ago

Every agent has different opinions and takes on how to do a short sale. The more short sales an agent closes, the more knowledge one gains, not to mention, short sales are very fluid, like the Everglades, always moving, always changing.

The most important thing to know about short sales is to hire an agent who has closed enough and worked with a variety of situations, lenders, to truly understand what is best for each seller -- because every situation is unique.

Posted by Elizabeth Weintraub Sacramento Realtor Top 1%, Put 40 years of experience to work for you (RE/MAX Gold) about 3 years ago

There are people who need to know this subject. You did them a good service

Posted by Richie Alan Naggar, agent & author (people first...then business Ran Right Realty ) about 3 years ago

Great info. Thanks for this post.

Posted by Vickie Teel, Sharing Florida sunshine one homeowner at a time! (Allison James Estates & Homes) about 3 years ago

Hi Dagny

Congratulations on a well-deserved feature. No doubt there are people who can benefit from this information plus finding the right/experienced short sale agent to help them navigate these difficult waters. I don't think they have gotten any faster or easier, although that may depend on the lender!


Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (eXp Realty of California) about 3 years ago

I like the list of questions you have to ask those who ask you if they should stop making a mortgage payment.

I am very cautious about giving answers outside my capability.

I am real good at referring to a professional.

Posted by John Wiley, Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA about 3 years ago

Short sales are hard; hard for the owner and hard for the agent. But this is a great list of questions and short sales. If one must take that road, its a better option then foreclosure in most cases.

Posted by Stavrula "Sam" Crafa, RNC,GRI, CDPE, PSA, Providing the integrity and service you deserve. (Future Home Realty) about 3 years ago

Dear Dagny,

This seems to boil down to getting all the data about the current situation, do some surgery, where possible & then do some hard thinking about which route to take to continue or abort the mission for the moment. Luckily, fewer & fewer home owners remain under water. This is very hopeful.

Posted by Dörte Engel, ABC - Annapolis, Bowie, Crofton & rest of Maryland (RE/MAX Leading Edge) about 3 years ago

                           Thank you Dagny Eason 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) about 3 years ago

No one wishes they could do a short sale....but it is often the very best choice.

Posted by Sally K. & David L. Hanson, WI Real Estate Agents - Luxury - Divorce (EXP Realty 414-525-0563) about 3 years ago


What a great informative post this is, and I love how you made it easy to read and simple.  You have a great style.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) about 3 years ago

Dagny Eason - I have to bookmark this post - one of the best written on this topic.

I know there are not many short sales around - but when it comes back...

Posted by Praful Thakkar, Andover, MA: Andover Luxury Homes For Sale (LAER Realty Partners) about 3 years ago