Patrick AFB PCS Blog


Patrick AFB Relocation: What is a Short Sale?

This article is part of "The Patrick AFB Online Relocation Package".


When looking for a home on the various online home search sites, you will inevitably come across the term "short sale". I have had many clients contact me and ask what that term means. Many of my PCSers are under the impression that a short sale will take a "short" time to complete and since they are very interested in getting into a home quickly, because they will be staying in temporary housing or a short term rental while they look for their home. The truth is that the term short sale has nothing to do with the time that it will take to complete the sale, and if it did, it should be renamed -  an excruciatingly long, bang my head against the wall, sale.

Simply put the "short" in short sale refers to that bank getting shorted on what is owed to them at the completion of the sale.  The seller of the property owes more on their home (loan balance and sales costs) than it will sell for in the current market.

An Example:

The sellers can sell their home for $175,000 in the current market, but they owe $200,000 (mortgage loan balance) plus $10,500 in selling costs. So in order to complete the sale the bank has to agree to take a loss of $35,500 ($200,000 + $10,500 -$175,000 = $35,500). Why would a bank do this? This type of sale is less damaging to the bank's bottom line. An outright foreclosure is much more expensive for the bank and will probably result in a bigger loss. Also the property will be abandoned and will certainly deteriorate over time resulting in a lower price. While the sellers and their agent are negotiating a short sale with their lender, they are able to stay in the home and will continue to maintain the property. These can be difficult transactions to complete with a lot of extra paperwork and it requires the sellers to prove to their lender that there is a financial hardship.

It sounds like a great deal, huh? We'll it can be if you have the patience and don't need a home right away. You can get a short sale for about 10% less than market value.

The main reason that these take so long is that the banks are just overwhelmed by these type of sales and it just takes a long time for them to get around to your file. The banks are trying to get better at these, but they still have a long way to go. 

The Bottom Line: After being confronted with these facts, I have very few clients PCSing to Patrick that want t persue this option. Many just want to get settled and their belongings are in storage and that could get costly for this type of wait. But, with about 24% (as of 1/1/2011) of the current homes for sale in Brevard County falling into the short sale category, and if you have a place to stay for a while, or want to rent for six months or longer, one of these short sales might be an attractive option. Just be prepared to wait and wait and wait....


John S Murphy is a full-time REALTOR® with RE/MAX Elite in Melbourne, FL. He is also the creator of, a website that specializes in PCS, DOD, and Civilian relocations to Patrick Air Force Base, FL. --- Doing a home search?  Visit his website and search the entire Brevard County MLS.

John S Murphy
John S Murphy
Certified Distressed Property Expert
(321) 626-0247 Logo


Comment balloon 0 commentsJohn S. Murphy • September 29 2008 02:31PM