If you receive a full price offer for the sale of your home, can the lender still consider the sale a short sale? What if the full price offer covers all expenses and covers the entire amount owed to the lender, would the sale still be a short sale?

Q: My house payments are six months behind and a sheriff's sale is scheduled. My home is also currently on the market. Out of the blue, a full price offer for my home came in. The mortgage company is telling me that although I have a full price offer on my home, the transaction would still be considered a short-sale due to my delinquent payments. They've also told me the only way to delay the sheriff's sale is to submit my full price offer as a short-sale. Is this true? Why would they want to consider an offer that would cover my debt to them as a short-sale?

A: While it’s great that you got a full price offer on your home, the amount that the buyer is willing to pay you for your home is not necessarily related to the amount you owe the lender. If you originally purchased the home for $200,000 and obtained a loan for $180,000 and you have now received an offer to sell your home for $180,000, you are probably short on funds to pay off the lender.

To know for sure that you have a short sale, you need to compare what the lender says you owe them with the amount you will receive from the sale of the home. Remember, even if your sales price at a full offer price, you’ll have other costs involved in the sale of your home: the listing agent’s commission, local transfer taxes, title and escrow company fees, and other costs and fees.

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