How Long Does a Short Sale Stay On Your Credit Report?

If you’re “upside-down” in your mortgage (owing more than the property is worth), you have a few options. One of them is a short sale. The process is complicated and confusing, often leaving a worrisome question in its wake: How long does a short sale stay on your credit? Along with extensive research, we consulted with Richie Helali, mortgage sales lead at HomeLight Home Loans, and Christina Griffin, a top agent who works with 68% more single-family homes than the average Tampa, Florida, agent, to help decipher the long and short of short sales.

What is a short sale?

A short sale is an alternative to foreclosure in which the homeowner gets permission from the lender to sell the home for less than the amount owed. Homeowners typically request a short sale due to some form of financial hardship, and they must be able to prove their inability to pay.

Short sales can occur when competitive buyers have overbid due to low inventory and high demand.