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A "short sale" is the sale of a house in which the proceeds fall short of what the owner still owes on the mortgage.

Why would you want or need to do this?  Some homeowners may have purchased their homes during the height of the real estate boom, but now, the same home may not be worth what it once was.  The solution: sell it for less than what is owed.  Some homeowners may have borrowed too much for their home (eg. 100% financing or refinancing). If the value of the home has not increased significantly since then, there may not be enough equity to pay all the costs associated with selling.  The solution: sell it for less than what is owed. 

However, in almost every short sale case, there must be a proven hardship on behalf of the seller.  It is not enough to simply say that you have to sell.  But rather, there must be some sort of extenuating circumstance that is preventing you, the seller, from selling the home and completely paying off the debt.

Many home owners who can no longer afford to keep mortgage payments current find that a short sale is the best alternative to bankruptcy or foreclosure proceedings. When lenders agree to a short sale in real estate, it means the lender is accepting less than the total amount due. Not all lenders will accept short sales or discounted payoffs, and not all Sellers will qualify for a short sale.  However, when lenders agree, they are betting that they can avoid a lengthy and costly foreclosure process.

While considering a short sale, sellers are always advised to seek sound advice from an attorney and/or CPA.  However, in any case, it it is imperative to contact a real estate professional immediately.  A Realtor who is trained in obtaining short payoffs will be able to lead a seller through the long process of gathering information, submitting the short sale request, listing the home, procuring and negotiating a bona fide offer to purchase with a Buyer... AND communicating that offer with the lender, all so that the seller may escape the stigma of a foreclosure as well as possibly save his or her credit report from more severe damage.

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