Real estate short sales are occasionally offered by banks as an alternative to foreclosure. Depending on the circumstances, lenders may agree to accept a lesser amount than is owed on the mortgage note. This type of transaction is typically reserved for Borrowers who are seriously delinquent on their mortgage payments.

In essence, short sales offer homeowners an opportunity to sell their property at a reduced rate and walk away from the property. In order for this type of transaction to fully benefit the Borrower, it is crucial for short sales to be properly negotiated. For this reason, it is important to hire the services of a specialist who is well-versed in negotiating real estate short sales. Otherwise, it could literally cost you thousands of dollars.

The primary goal of short sales negotiation is to convince your lender to accept 'payment in full without pursuit of any deficiency judgment'. What this means is the lender agrees to accept a lesser amount and will not pursue you for the difference.

Some lenders require you to pay the difference between the short sale and actual loan amount. Depending on how the contract is written, you may also have to pay income tax on the difference. Short sales are not without risk and you must read the fine print carefully. At minimum, retain the services of an attorney to review the documents before signing on the dotted line.

If you are facing foreclosure, a short sale could be the solution to your problem. Using this method, you can sell your house, salvage what is left of your credit and avoid foreclosure. However, not everyone will qualify for short sales. Certain requirements must be met including your ability to show just cause for your financial hardship.

It's also important to keep in mind that today's real estate market is in a slump, so it won't be easy to sell your home. This isn't to say it won't happen, but you need to be prepared in case your home doesn't sell. Oftentimes, lenders require a specific amount of time for you to sell your home. If it doesn't sell, they move forward with foreclosure. Others require that you already have a Buyer in place before allowing you to submit a short sale package.

Although requirements for real estate short sales vary from lender to lender, most will require the following information:

1. Documentation of income and expenses including pay stubs, receipts, bank statements, tax returns

2. Financial Hardship Letter

3. Realtor listing documents

4. Estimate Settlement Statement (HUD-1)

5. Signed sales contract and proof of buyer's financing

Additional short sales requirements state you cannot have any equity in your home and must owe more on the loan than the home is worth. As you can see, short sales can be complicated and complex. Hiring a professional, who can assist you in organizing and negotiating a short sale offer, can save you time and money, as well as reduce your stress.

Short sales can be a life-changing option for many people. It's not easy to throw in the towel and walk away from your home, but sometimes you have to. There is no other choice. Take time to learn about the pros and cons of short sales. Talk to your lender to see if you qualify or if they are willing to accept a short sale package from you.

If you meet the qualifications, but your lender refuses to accept an offer from you, seek out private real estate investors who specialize in short sales. Through their network of investors and banks, they can oftentimes help find a buyer for your house and negotiate with your lender.

Use caution when providing private information to individuals or organizations who offer to buy your property. Do not submit your personal information unless you are confident you're dealing with a reputable organization. Instead, call the number listed on their website and talk to them. Legitimate investors will be happy to take your call and answer your questions.