How to write a Short Sale Hardship Letter

Real Estate Broker/Owner with LinkUp Realty

How to write a Short Sale Hardship Letter

Short Sale Home

Despite the recent improvement of our housing market on a national level, a high percentage of home owners still find themselves in a negative equity position where they owe more than the value of their home.  If you are in a difficult financial situation like much of the country,  a short sale may be the only alternative to a foreclosure.  We do have a saying we use in the business, "a short sale is only for those that HAVE to sell, not for those that WANT to sell".  In a short sale, your lender will require you to prove your financial hardship, and the short sale hardship letter is a critical piece of required documentation.


Short Sale Hardship

What constitutes a "financial hardship"?

  • Loss of employment or reduction in income
  • Death in family or major unexpected medical expenses
  • Relocation or Job Transfer
  • Increased bills or expenses
  • Major repairs needed to property, without resources to pay for them
  • Divorce

  By the time a home owner is considering a short sale, most have already done a "band aid" loan modification, either a forbearance or repayment plan, which is a temporary solution to a long term problem.  If you have already written a hardship letter for a loan modification, you will need to write a new one that is more specific to a short sale.

Here are some common things that a short sale hardship letter should and should not contain:

  1. The hardship letter should be signed and dated
  2. Reference the property address and loan number in the header
  3. It should be short and to the point, 5-10 sentences in enough
  4. State your hardship, and the circumstances that led you no longer being able to afford the property
  5. Make a strong case and relay the desperation of your case
  6. Do not blame your lender for your circumstances
  7. Do not write to much, they don't have the time to read it
  8. End the letter with something like "a short sale seems to be our only solution to avoid foreclosure" or "please consider a short sale on our property, we can find no other answer to our circumstances"
  9. Again, don't forget to sign and date it!

CLICK HERE to see some sample short sale hardship letters

While you may be stressed from the financial situation in your life, know that this is only a temporary season in your life.  All things come to pass.  While the short sale process is anything but "short", you can recover your credit and be ready to purchase a home again in as little as 18 months.

In a short sale, it is important to have an experienced agent to guide you through the short sale process.  ALL traditional closing costs are paid for by your lender in a short sale, including your real estate brokerage fees.  To find a local short sale Expert who will help you with the process at no cost to you, visit  That site is also a top resource for anything related to short sales including other required documents, and lender specific guidelines and contact information.


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13241 Bartram Park Blvd Suite #605
Jacksonville, FL 32258
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Comments (11)

Dennis Duvernay Broker/Owner
Hillview Realty - Northbridge, MA

Very good info Mike. Thank-you.

Oct 28, 2009 05:41 AM
Mike Linkenauger
LinkUp Realty - Jacksonville, FL
Short Sale Realtor - Jacksonville FL

Thanks Dennis!  There are also six or seven real hardship letters on the attachment as well that people can use as examples

Oct 31, 2009 01:23 AM
John Occhi
AZ Veteran Notary Services - Marana, AZ
Mobile Notary Public/Certified Loan Signing Agent
Thanks for providing this sample - looks good Merry Christmas, John
Dec 07, 2009 06:54 PM
Mike Linkenauger
LinkUp Realty - Jacksonville, FL
Short Sale Realtor - Jacksonville FL

A short sale hardship letter is definately one of the most important pieces of a short sale package.  It is also important that the letter is simple.  I've seen many letters that go on and on about peoples situation, or problems they've had refinancing, ect...  These lenders definately don't have time to go through all of this!  Keep it simple!

Dec 16, 2009 12:24 AM

this info is excellent, i am so grateful that you posted this....god bless you!!!

Feb 09, 2010 04:22 AM
Gloria Todor
Premier Property Sales & Rentals - Springfield, PA
& Doug Durren (484) 431-3686 in SE PA

Mike,  Thanks for your samples and advice.

Sep 17, 2010 05:37 PM
Mike Linkenauger
LinkUp Realty - Jacksonville, FL
Short Sale Realtor - Jacksonville FL

It is definitely important for home owners to find the correct information and guidance when considering a short sale.  I do believe the hardship letter is perhaps the most important part of a short sale package, and home owners in hardsip should certianly understand how to write a short sale hardship letter.

Oct 26, 2011 05:05 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA

This is great advice for home sellers. 

Thanks for taking the time to share.

Best wishes for a productive week!

Sep 09, 2014 12:15 PM
Mike Linkenauger
LinkUp Realty - Jacksonville, FL
Short Sale Realtor - Jacksonville FL

It is amazing how many home owners are still upside down on their home and are finding this information about how to write a short sale hardship letter beneficial. Short sales are still the best alternative to a foreclosure in most cases.

Mar 21, 2017 07:50 AM
Mike Linkenauger
LinkUp Realty - Jacksonville, FL
Short Sale Realtor - Jacksonville FL

Putting another short sale in Jacksonville on the market today. We are gearing up for another influx as it is clear that the market has cooled off and the economy is changing.

Jun 11, 2019 09:06 AM