Selling your home for less than you owe

If you can’t afford your current mortgage, and staying in your home isn’t an option, a short-sale might help you avoid foreclosure. It allows you to sell your home for less than you owe on the mortgage, and may release you from having to repay the remaining mortgage balance.
Depending on your situation, you may be eligible for a short sale through the federal government’s Home Affordable Foreclosure Alternatives program, or through a different program.

How a short sale could help

  • You avoid a foreclosure sale. Even if one is already scheduled, it may be postponed if a signed purchase offer is received and approved by Wells Fargo Home Mortgage.
  • You pay no fees. Wells Fargo Home Mortgage covers all closing costs and real estate agent fees.
  • It may be less damaging to your credit score than a foreclosure sale.

Important considerations

  • You can’t sell your home to anyone you have a close relationship with, including family or friends.
  • In rare cases, homeowners have to pay a deficiency balance at closing or afterward. We’ll let you know if this applies to you before you commit to transferring the property.
  • If you don’t have to pay the deficiency balance, you may have to report that amount as income for tax purposes. Consult your tax advisor.
When you’re ready to get started, here’s how the process will work:

Step 1: Talk to your home preservation specialistShow Details

Call 1-800-678-7986 or submit an online request to start the conversation. Your home preservation specialist will talk with you about your situation, and let you know what options might be available.
If you’re ready to move forward, we’ll send you a package with all the forms and documents you need to complete your request for assistance. Make sure you get started on these right away — we can’t begin processing your request until we have all the required documentation. Use our mortgage assistance document checklist to see what you may need to provide.

Step 2: Work with your real estate agentShow Details

If you don’t already have a real estate agent, you’ll need to choose one quickly to help you sell the home. Your home preservation specialist may give you a list of several agents in your area who have short-sale experience. As soon as you have a real estate agent, you’ll need to send Wells Fargo a written authorization that allows us to work directly with him or her, and to share information about your account. Either your home preservation specialist or your agent will provide a Third Party Authorization Form to use for this.
You and your agent will also need to complete a listing agreement, and send a copy signed by all parties to Wells Fargo as soon as possible.
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Check documents carefully

Missing or incomplete documentation is the #1 reason short sales don’t make it through the process.

Step 3: We review your loanShow Details

Your real estate agent will put your house up for sale and market it to potential buyers. Like any real estate listing, the price should reflect the actual market value of your home. To help determine the right asking price, Wells Fargo will order an appraisal of your property, and your agent will check recent sale prices for comparable homes in your area.
Market conditions can vary dramatically over time, and from one area to the next. Your real Keep deadlines in mind Some programs require you to estate agent will play a critical role in determining the best way to make the home appealing to buyers.
Depending on how long it takes to receive an offer, you may need to resend some of the documents you submitted with your original request. We’ll try to avoid having you send things more than once, but some documents — such as pay stubs and bank statements — are only valid for a certain period of time. If they expire before the short sale is finalized (which often happens when a home is on the market for a long time), your home preservation specialist will ask you to send more recent documents.
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Keep deadlines in mind

Some programs require you to start over if you don’t list your home and have a contract within 120 days. Ask your home preservation specialist what deadlines you should plan for.

Step 4: Submit an offerShow Details

When you receive an offer for the home, send Wells Fargo the fully executed purchase contract. We can only review one offer at a time, so you should send the highest and best offer you’re able to get.
We’ll work with you and your real estate agent to collect any required documents — such as the HUD-1 settlement statement — and contact the investor and mortgage insurance company to negotiate the terms of the short sale and request approval. The approval process varies, so ask your home preservation specialist what steps apply to your situation.
If the short sale is approved, we’ll send an approval letter to you and your agent, and let you know what to do next.
Approximate timing for this step: 30 days
Myth. Wells Fargo decides whether to accept or reject an offer on my home. Truth. The decision ultimately rests with the investor who owns your loan. In most cases, that's not Wells Fargo.

Step 5: Complete the processShow Details

After receiving the approval letter, you’ll need to work closely with your agent, the buyer, and Wells Fargo to schedule and conduct the closing. To close the sale, each party to the transaction will review, approve, and sign all the necessary documents.
Keep in mind that the approval letter is only valid for a certain period of time. If it expires, you may need to start over, so do everything you can to complete the process quickly.
Approximate timing for this step: 40 days. The actual timing depends on the schedule you and the buyer agree to.

Step 6: SettlementShow Details

After the closing, ownership of the property is transferred to the buyer, and proceeds from the transaction are distributed according to the approved terms of the short sale. When Wells Fargo receives the required funds, we process the final payoff and close out the transaction.
Approximate timing for this step: 2 days
Phone icon.Contact a Home Preservation Specialist at 1-800-678-7986
Start the process by filling out an online request:
Already working with us on a loan modification?


Deficiency Balance

The difference between the amount still owed on a mortgage and the amount the home is sold for by the borrower (in the case of a short sale) or by Wells Fargo (in the case of a deed in lieu of foreclosure).
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Wells Fargo Bank, N.A. is required by the Fair Debt Collection Practices Act to inform you that if your loan is currently delinquent or in default, as your loan servicer, we will be attempting to collect a debt and any information obtained will be used for that purpose. However if you have received a discharge, and the loan was not reaffirmed in the bankruptcy case, we will only exercise our right as against the property and are not attempting any act to collect the discharge debt from you personally.
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