The site below provides a lot of great short sale information for buyers and sellers.....

Camille, would agree with much of what Yvonne said, but one thing I will point out is that contrary to popular belief, you do NOT have to be behind on your payments.

Good Morning Camille........A short sale is when a mortgage lender agrees to discount a loan balance due to a financial hardship on the part of the home owner/debtor. Additionally, the home owner/debtor needs to be a few months behind in their mortgage payments before the lender will consider a short sale. The negotiation is all done through communication with a bank's loss mitigation department. The home owner/debtor sells the mortgaged property to a buyer for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the mortgage lender in full satisfaction of the debt. The mortgage lender has the right to approve or disapprove of the proposed sale.

Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation.

A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history.

Yvonne Baker, Real Estate Consultant http://www.YvonneBaker.com
ycbaker@kw.com