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.

If you haven’t paid the lender for six months, you need to add all of those payments to what you owe the lender. You also may need to add any other amounts you now owe the lender, including late fees and payments the lender may have made on your behalf for real estate taxes and homeowner’s insurance.

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.

Those other costs and fees can really add up. Let’s say the lender says you owe still owe them $180,000 and you receive a full price offer of $200,000, you could still be short of funds at the closing because of all of the extra fees involved in selling.

Please review the numbers from the sale of your home to determine how much you will have from the sale to actually pay the lender after you pay all of the expenses from the sale.

For more on Short Sales

Foreclosure or Short Sale: Which Is Better And Can The Lender Get A Deficiency Judgment?

Mortgage Payments Missed: Options Include Short Sale, Deed In Lieu of Foreclosure

Second Mortgage Lender May Cause Short Sale To Fail