Can anyone explain IN DETAIL (if possible) how a short sale works?
How is it different than foreclosure?
Does it hurt your credit?
Do you have to be in default of mortgage payment in order to do a short sale?
If you own two properties, could you SHORT SALE one but NOT the other?

ANY EXPLANATION WOULD HELP!! THANK YOU!

Ok a foreclosure is where you can't pay, don't pay and they take legal action to take the home away from you. It reports on your credit report as a foreclosure.

A short sale, if you owe 100,000 on the property, and you get a offer for 90,000, you ask the lender to accept it, if they do, then you sell the house for 90,000 and they take a loss for the 10,000 but don[t love a lot more on the property.

Each property will be considered by the lender, you have to get an offer, submit it to the lender and let them decide if they will sell it short or not.
Also the real estate agents have to OK it also, since most short sale contracts from the mortgage company, limits the commission that is allowed, since the mortgage company is accepting less they nomally reqire the real estate agents to take less also.

You don't have to be in default or late, but if you are not late or in default, why would they want to accept less.

Also they don't have to accept a short sale, I have seen dozens of short sales refused this last few months.

:) No If You Sell Your Home On A Short Sale It Does Not Hurt Your Credit
If Your Home Is Worth 100,000 And An Investor Offers You 85000-90000
You Still Have To Get The Offer Approved By The Lender Unless You Own
The Property Free And Clear And Once The Offer Is Aprove By The Lender
The Remaining Balance Is Wroteoff With The Lender As A Forgiven Death And At The End Of That Year You Will Receive A 1099 Form To File With Your Taxes At The End Of That Yr. The Remaining Balance Is The 10,000 From The Example
Given At The Top Of This Explanation

Home Value 100,000

Short Sale Aprove By Lender 85-90,000

Writeoff Forgiven Death 10,000

And That's How A Short Sale Works

And No You Do Not Have To Be In Default On Your Mortgage

To Sell It On A Short Sale

Check the new rules on if you will get a 1099 at the end of a short sale. Last December President Bush signed into law several exceptions for this. Generally speaking if it is your main residence and you are insolvent you will not receive a 1099 at the end.

Ricky - no need for a "short sale" if home has no lien/mortgage.