Can I Sell My Home If I Owe More Than It’s Worth in Bakersfield?

If you owe more on your home than it’s currently worth, you may be wondering what your options are. One option that sometimes makes sense is a short sale. Below are answers to the most common questions homeowners ask when they’re considering a short sale in Bakersfield.

In this guide, you’ll learn:

• What it means to be underwater or upside down on your mortgage
• Whether you can sell a home for less than what you owe
• How the short sale process works in Bakersfield
• What lenders look for when approving a short sale
• How a short sale compares to foreclosure

Short Sale Q&A – Frequently Asked Questions

If you owe more on your home than it’s currently worth, you may be wondering what your options are. One option that sometimes makes sense is a short sale. Below are answers to the most common questions homeowners ask when they’re considering a short sale in Bakersfield.

What Is a Short Sale?

A short sale occurs when a homeowner sells their property for less than the total amount owed on the mortgage, and the lender agrees to accept the lower payoff instead of moving forward with foreclosure.

Example:
If you owe $250,000 on your mortgage but the home is only worth $175,000, the lender may agree to accept the $175,000 and forgive the difference.

Why Would Someone Consider a Short Sale?

Homeowners typically consider a short sale when they are experiencing financial hardship and can no longer afford their mortgage payments. Common reasons include:

• Job loss or reduction in income
• Divorce
• Medical expenses
• Unexpected financial hardship

A short sale can help homeowners avoid foreclosure, regain control of the selling process, and move forward with less long-term damage to their credit compared to a foreclosure.

How Long Does a Short Sale Take?

Short sales usually take longer than a traditional home sale. This is because the lender must review and approve:

• The seller’s financial hardship
• The buyer’s offer
• The final payoff amount

The timeline can range from a few months to longer, depending on how many lenders are involved and how complete the documentation is.

What Happens to My Credit After a Short Sale?

A short sale will impact your credit, but not as severely as a foreclosure. While every situation is different, many homeowners are able to recover and qualify for another home loan sooner after a short sale than after a foreclosure.

What Happens If the Short Sale Is Not Approved?

If the lender does not approve the short sale, the property may move forward into foreclosure. This is why it’s important to work with an experienced agent who understands the short sale process and lender requirements.

What Does the Bank Require for a Short Sale?

Most lenders will require a short sale package, which often includes:

• A hardship letter
• Financial documents (bank statements, pay stubs, tax returns)
• A listing agreement
• A purchase offer from a qualified buyer

Providing complete and accurate information is critical to improving the chances of approval.

What Is a Hardship Letter?

A hardship letter explains why you can no longer afford the home. This letter helps the lender understand your situation and decide whether to approve the short sale. Honesty and clarity are key.

Can I Do a Short Sale If I’m in Bankruptcy?

Yes, but bankruptcy can complicate or delay the process. If you are in Chapter 7 or Chapter 13 bankruptcy, coordination between your attorney, lender, and real estate agent is essential before moving forward.

Will the Bank Come After Me for the Difference?

In some cases, the lender may forgive the remaining balance. In other situations, you may receive a 1099-C for the forgiven debt, which could have tax implications. It’s always best to consult with a tax professional regarding your specific situation.

Is a Short Sale Better Than a Foreclosure?

In many cases, yes.

Short Sale:
• Voluntary process
• More control for the homeowner
• Typically less credit damage

Foreclosure:
• Forced by the lender
• Significant credit impact
• Fewer future financing options

Every situation is unique, but a short sale is often the less damaging option when foreclosure is likely.

Should I Work With a Short Sale Specialist?

Short sales involve lender negotiations, strict timelines, and extensive documentation. Working with an experienced real estate professional who understands short sales can help reduce delays, avoid mistakes, and improve the likelihood of approval.

Need Help With a Short Sale in Bakersfield?

If you’re unsure whether a short sale is the right option for you, we’re here to help. Our team can review your situation, explain your options, and guide you through the process step by step.

How Do I Know If I Qualify for a Short Sale?

Each lender has different requirements, but most short sales are approved when a homeowner can show financial hardship and the home’s market value is less than the mortgage balance.

Do I Need a Short Sale Realtor in Bakersfield?

Short sales involve lender negotiations, deadlines, and extensive documentation. Working with a real estate professional experienced in short sales can help avoid delays and improve the likelihood of approval.

Can I Buy Another Home After a Short Sale?

In many cases, buyers may qualify for another mortgage sooner after a short sale than after a foreclosure. The timeline depends on the loan type and individual financial recovery.

Will I Owe Taxes on a Short Sale?

Some forgiven debt may be reported on a 1099-C. Tax implications vary, so it’s best to consult a tax professional about your specific situation.

Talk to a Short Sale Expert Before It Becomes a Foreclosure

We’re seeing more bank-owned and foreclosed properties in Bakersfield that could have been avoided with a short sale. Many homeowners don’t realize they still have options until it’s too late.

Linda Bañales is a highly experienced local Realtor and Broker Associate who has successfully handled many short sales throughout her career. She understands lender requirements, timelines, and how to guide homeowners through the process with clarity and discretion.

If you think you may be underwater on your home — or you’re worried about missing payments — it’s important to get answers early.

📞 Contact our team today to speak with a knowledgeable short sale specialist and understand your options before foreclosure becomes unavoidable.  Click Here to connect with Linda

Linda Banales, Broker Associate 
Cal DRE 01172638
661-303-5401
linda@bakersfieldrealestategroup.com
Watson Realty
9101 Camino Media Bakersfield, CA 93311