As millions of Americans are being faced with foreclosure, short sales have become a quick way avoid this disastrous financial tumble. So if you find yourself in a mortgage pinch with no where left to turn with the house, how do you navigate a short sale?

Obviously, you have are considering a short sale because you can no longer pay your mortgage. If you continue not to pay, you are at risk for a foreclosure which can be finalized in as little as six months from your last housing payment.

To initiate a short sale, the seller contacts their mortgage lender in hopes to arrange a housing price that is less than the amount owed on the house. The lender also typically agrees to forgive the rest of the loan.

Personal information is then released about the short sale to the escrow company. Obviously the next buyer that comes along will get the mortgage at a discount from the lender.

As a seller, you must be prepared to deal with a lot of paperwork and the chance you might not qualify. You must prove to the lender you qualify for a short sale payoff. Here is where you can work with a Realtor that who specializes in short sales, or you can gather the paperwork needed yourself which includes such information as the purchase agreement, a list of repairs with quotes for bids, a seller’s hardship letter, net sheet (HUD-1) and tax returns plus a formal offer with a time limit.

Most importantly often you are paying what is owed entirely in cash. Lenders will more seriously consider short sale offers that are entirely in cash, with a 30-day-or-shorter closing and no contingencies, the link above states. So you must have deep pockets for a short sale.

The more educated you are on the process of short sales, the easier the transaction will be and the better the impression you will make on the lender who will in turn get your house off your hands in short order.