 TITLE: What Is a Short Sale? CONTENT: How Short Sales Work\n--------------------\nFor the most part, a short sale works like a typical home sale. The seller contacts a real estate agent, notifies them that they'd like to put their home on the market and waits until potential buyers start making offers.\nUnlike a traditional home-selling scenario, however, the seller will have to notify the real estate agent that it's a short sale and submit offers to their mortgage lender for approval. Since the homeowner is trying to sell the house for less than what they owe on the mortgage loan, the lender must be on board with the transaction.\nIn addition to submitting the offer to the lender, the homeowner must also submit documentation that explains why they're engaging in a short sale. In particular, the homeowner must prove that they can no longer make mortgage payments and a short sale is the best solution for both them and the lender.\nRequired documents can vary by lender. But in general, you should expect to provide income documents, such as pay stubs, W-2 forms, tax returns, bank statements and more. You may also need to provide a hardship letter or affidavit to explain why you can't make your full monthly mortgage payments.\nOnce you submit your request and documentation, the lender may order an appraisal on the home to determine whether the offer is satisfactory. That doesn't necessarily mean the lender will reject an offer below the home's market value.\nIn fact, lenders are often willing to approve short sale offers below market value to avoid the foreclosure process, which is costly and time-consuming for both the lender and the borrower. END