There are two important things you should do:
First, find an agent who has handled several short sales or one who has a good mentor willing to oversee the deal and make sure everything is handled properly.
Second, educate yourself on short sales. This is a complicated way to sell a home and you should understand exactly what is going on. I often recommend the following blog entry because it goes into some subtle, yet important issues about short sales:
I hope this helps.
Prudential Real Estate of the Rockies
My suggestions are as follows:
1. Talk with a Realtor who has short sale experience. If you would like I can refer a great Realtor that can analyze your situation and provide you with recommendations
2. The short sale process has three different components:
a) Legal liability - the lender(s) who you owe money are going to review your mortgage applications and ask how it is that you could qualify for the payments earlier, and are unable to make them now. They will be looking for loan fraud.
b). Tax liability - depending upon the type of loans you have (purchase money loans - used to buy the home, versus re-finance loans, when you took out cash) have different consequences. You should talk with your CPA.
c) Hardship - you are going to need to prove to your lenders that due to circumstances beyond your control you are no longer financially solvent (able to pay your debts). Short sales are not going to be approved just because you are upside down (loan balances versus home value).
Typically the Realtor will not negotiate until the lender and you have authorized them to contact the lender. Then, the issue will still be, will the lender(s) approve the short sale, and will they approve it with terms that you agree?
Let me know if you need help.
I am sorry to have learn that you are facing this unpleasant situation. Thank God that there is help out there.
It is very important to hire an experience Realtor to represent you, one that have closed short sales successfuly. There is no room for mistakes.
Please take a look at this blog http://irenapopilevsky.wordpress.com/2010/02/13/short-sale-b
and make sure to view the video.
Good Luck to you.