click > http://www.trulia.com/blog/antonio_vega-pacheco/2009/12/fore
And this one will help you decide if a short-sale is convenient in your situation;
click > http://www.trulia.com/blog/antonio_vega-pacheco/2011/08/when
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At this point, the lender must decide how to resolve the account usually by either foreclosing the property or allowing the homeowner to sell the home for less than what is currently owed. A foreclosure is a long and expensive process for the lender which still leaves the lender with a house they must sell. Another option (usually better for the homeowner) is for the lender to allow the homeowner to sell the home for less than what is currently owed on the property, thus the "short sale". When a short sale occurs, the balance of the mortgage not satisfied with the proceeds of the sale (known as the deficiency) is written off in most cases, unlike with a foreclosure.
Make no mistake, a short sale is a complicated process. Hire professionals who can guide you through it. Best of luck!
The sellers are asking the bank to accept the lower amount, and not hold them responsible for the balance of their loan.
The sellers will list their home, accept an offer, and then wait for the bank to approve the sale. Everything is subject to bank approval.
This can take months, and there is no guarantee that it will ever close.
It takes longer than a conventional sale because the buyer and seller reach an agreement and then that agreement has to go to the bank for their consideration. The contract is "subject to lender approval".
I hope this helps.
Myke Triebold, GRI, SFR ABR