You’ll find our blog to be a wealth of information, covering everything from local market statistics and home values to community happenings. It also has valuale tips whether you are buying, selling, or experiencing financial hardships. We want to give you helpful information before you take any action, or avoid action altogether. Please reach out if you have any questions at all. We’d love to talk with you!
Do I have to pay taxes on a short sale in 2026?
The federal tax exclusion for forgiven mortgage debt on a primary residence expired on January 1, 2026, after being extended repeatedly since 2007. Unless Congress passes a new extension, mortgage debt forgiven in a 2026 short sale is generally taxable income by default.
If my house sells for less than I owe, do I have to pay the difference?
Not necessarily. Many lenders agree to a deficiency waiver as part of the short sale approval, meaning they agree in writing not to pursue the borrower for the remaining balance. This should always be confirmed in writing before closing.
Can I do a short sale if I have a second mortgage or owe HOA fees?
Yes. Multiple liens, such as a second mortgage, a home equity line, or an HOA lien, don't automatically prevent a short sale, but each lienholder must separately agree to release its claim before closing.
Does a short sale hurt my credit as much as a foreclosure?
A short sale typically does less damage to a borrower's credit than a foreclosure, and most borrowers can qualify for a new mortgage sooner afterward. The waiting period to qualify for a new mortgage after a short sale is commonly two to four years, often shorter than after a foreclosure.
Why does my short sale need so many approvals?
Depending on the loan, a short sale can require approval from the loan servicer, the investor that owns the loan, a government insurer such as FHA, VA, Fannie Mae, or Freddie Mac, and any junior lienholders like a second mortgage or HOA lien. Each layer reviews independently.
Who decides the price in a short sale — me or the bank?
The lender, and in many cases the investor that actually owns the loan, makes the final decision on price and terms, not the seller and not the listing agent. The lender bases its decision on its own valuation of the property.
