What is a short sale? A short sale happens when a seller must sell their home for less than what is owed to their mortgage company or companies.  For instance, if a seller owes $130,000 to their first mortgage company and $25,000 to their second mortgage company for a total of $155,000 and their home is worth $105,000 in today's market.  To qualify for a short sale a seller must show that they have had some sort of hardship leaving them unable to make their payment obligations.  Hardships would include illness, loss of employment, etc. 

The benefit of a short sale to the seller is that they can avoid a full foreclosure proceeding and often the mortgage holders will consider the proceeds of the short sale as full compensation, waiving any future right to sue the seller for a deficiency judgement.  Once a seller elects to do a short sale, they hire a realtor and together arrive upon a price at which to market the property based on the realtor's expertise of the local market conditions.  The property then gets marketed through the MLS system for sale "subject to short sale approval".  Once a buyer writes an offer, a package gets submitted to the mortgage company (or companies) for consideration.  The consideration process can take anywhere from 14 days to 120 days or longer depending on the circumstances. 

If you are considering selling your home on short sale the first thing to do is speak with your lender to see if you might qualify under their guidelines.  The second and by far most important is to hire a professional, local realtor experienced in short sales. 

 If you are a buyer considering a short sale you must be prepared to be very patient.  If you have to be into a home in a short period of time, a short sale is not for you.