Foreclosure has a negative impact not only on homeowners, but also their neighborhoods and local economy. One way to avoid foreclosure is with a “short sale,” in which the lender is willing to accept a payoff that is less than the balance of the loan. Such a sale still benefits the lender, supports home values, and helps the seller maintain a level of credit.

Because “short selling” is a different process for different types of loans, the expertise of a real estate agent is required in these complicated transactions. A “normal” sale usually involves 2 real estate agents, the seller, the buyer, the buyer’s lender and other professionals. A short sale involves all of those plus the seller’s lender or lenders if their are a first and second mortgage, counselors, lien holders, insurers and more.

The National Association of REALTORS has worked to help agents understand and solve the problems involved in short sales, including the piles of paperwork, overextended loss mitigation departments, and appraisals that don’t reflect seller duress or recent foreclosures in the neighborhood. Some agents have gone the extra mile and worked to receive the designation of Certified Distressed Property Expert which provides training to gain the knowledge specific to handling short sales. I

You might consider speaking with an agent who is a Certified Distressed Property Expert about a short sale if you meet these basic criteria: you’re behind on payments, you can prove legitimate hardship, and have little or no equity. With the expert knowledge and guidance of these real estate professionals on your side, you have an opportunity to salvage your credit and avoid the pain of foreclosure.