What is Short Sale?
A Short Sale, also called "Short Pay" or "Pay Off" is a transaction that allows for the sale of property for an amount that is less than the amount that owed to the lender. The bank in return my accept the proceeds as full settlement of the debt. For more information, click here

A Short Sale Process
Working with a lender to get a Short Sale approved is a ‘process’ in the truest sense of the word.
The success of a Short Sale is highly dependent on everyone involved in the process understanding that the transaction will move at its own pace – which is not always slow – and that the process is frequently not free of obstacles.

What a Short Sale does, is allow you to sell your property at a price that is less than the amount owed. For those who want an answer to avoid foreclosure, a Short Sale is frequently the best option.

Here are some tips to help you get through the Short Sale process and feel the better for it.
How to Stop Foreclosure With a Mortgage Short Sale

 Step 1. Contact a Real Estate Agent or Realtor- You will need a realtor who can help you establish the amount that you can sell your home for approximately. You can let the realtor know that it will be a short sale. Your lender can help you negotiate the amount that the realtor will be paid because their payment will come out of escrow before the lender is paid.  
Step 2. Contact Your Lender- Let your lender knows that you cannot make your payment or you need to move and sell your home. Give them the sale estimates that you received from your realtor. Tell them that your only choice is to do a short sale. Most likely, they will try to work with you to create the best outcome. You will not receive any proceeds from the sale of your home in a short sale, but your realtor will be paid, taxes and cost will be paid and the lender will be paid the balance.  

Step 3. Collect Your Documents- Your lender will want to review some documents to verify that your mortgage is truly a financial problem. Getting your Short Sale moving as quickly as possible will mean putting your documents together as early in the process as possible. For a list of the documents your lender will want to see, click here.
Step 4. Sell Your Home- Do your best to sell your home. Even though you will not make any money from the sale, it is still best for your credit if your home sells. It will also release you from the payments and other fees associated with home ownership. If you are facing foreclosure, a short sale is a win win situation.

Step 5. Short Sales Take Time- Getting a Short Sale sold, approved and closed takes time. If you feel a Short Sale may be your best option, don’t wait until the last minute. In my experience, you should allow at least 45 days to get lender approval for a Short Sale.  
Step 6. Get Good Input- As you work through the Short Sale process, issues will arise on which you may want advice. Go to trusted sources for input. You should strongly consider speaking with an attorney and a tax professional on the legal and tax issues that will likely arise before, during and after your Short Sale.

Step 7. Stay In Your Home- If you can do it, stay in your home until your Short Sale escrow is closed. There is no point in moving out and paying rent elsewhere, if you can stay in your property until the Short Sale is done and save money.

Step 8. Look Forward- You and your family will get through this. Look beyond the approval and closing of your Short Sale to a time when you will be able to take advantage of the financial flexibility you will have that, had you lost the home to foreclosure, you probably would not have.