A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to 
overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.
But to be technical, here’s a more official definition:
* A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value.
* A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short’ of the total value of the mortgage.
For homeowners to qualify for a short sale, they must fall into any or all of the following circumstances:
* Financial Hardship – There is a situation causing you to have trouble 
affording your mortgage.
* Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
* Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.
This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals.
Make sure you consult to a qualified real estate professional to see whether Short Sale is the right option for you. Qualified professional is someone who holds two of the national designations in foreclosure prevention counseling: the Certified Distressed Property Expert (CDPE) from the Distressed Institute and the Short Sale and Foreclosure (SFR) certifications from the National Association of REALTORS. (IM)
PDF This post was submitted by Rudy Lira Kusuma, CDPE®.
