All of us know that foreclosures have become commonplace throughout the state of Massachusetts. Massachusetts real estate property owners have been hit hard. During these difficult financial times, you probably have heard, the term “short sale” used often. Short sales are extremely important because, when done properly, they have the potential of allowing a property owner to avoid bankruptcy and mortgage foreclosure, even if the property owner owes more to the bank or lender than the property is presently worth. The purpose of this website is to provide some basic information about short sales and let you know we can help.. For specific information about your situation, please contact our Real Estate Office.


A short sale is the sale of real estate where the lender agrees to accept less than the amount owed on the mortgage as part of an agreed upon sale, instead of completing a foreclosure action of the property. For example, if a property owner owes $300,000.00 to the bank or lender but can only sell the house for $200,000.00, a short sale would allow the owner to sell the property, pay all of his/her closing costs and the bank would consider the mortgage paid in full.


Although every bank or lender has its own rules and procedures they will usually approve a short sale request, if all of the following conditions are met:

  • The price requested by the owner for the short sale must be fair and equitable and represent the true market value of the property. The lender will verify the market value by obtaining its own appraisal of the property. In other words, although most lenders do not want to foreclose a homeowner’s property, they also try to protect themselves as much as possible and will not take substantially less than the property is worth.

  • The current homeowner must not have the financial capability to pay the balance of the mortgage. The mere fact that a property owner is behind in his/her mortgage payments and that the property value is worth less than the mortgage owed, is not sufficient for a lender to agree to a short sale. The lender will need documented proof that the owner does not have the financial ability to pay the shortfall. If an owner does in fact have the means to pay the shortfall, the short sale most likely will not be approved. A financial affidavit, supporting financial details such as tax returns and bank statements will be required.

  • An executed real estate contract for sale must show a buyer ready to purchase the property.

  • All of the proceeds from the short sale can go to the lender.. If the owner wants to be able to sell the house without paying the lender in full, then the lender will not allow the buyer to receive any proceeds at closing.

  • Prepared Closing Statement. The lender will want to see exactly how much it will net from the proposed short sale before it agrees to the short sale request. Our experienced Massachusetts Short Sale Attorney will prepare this closing statement and include it in the package being sent on your behalf to the lender. The lender will want to see that all of the closing costs are reasonable and that nobody is getting any funds that could be going toward the mortgage. 


Some of the benefits of a properly performed short sale in Massachusetts:

  • Avoiding foreclosure . The negative effect on your credit and other negative consequences of foreclosure may be avoided by the successful negotiation of a short sale by an experienced Massachusetts Real Estate Professional.

  • Avoiding bankruptcy. Even when a homeowner is behind in mortgage payments and owes the lender more than a house is worth, a successful short sale in Massachusetts could allow you to avoid filing for bankruptcy.

  • Eliminating the balance of any mortgage and home equity line of credit that you owe to the lender