I have recently had the opportunity to learn a bit about short sales. What is a short sale? It's an term used in the banking industry when the proceeds of a sale fall short of the balance. Who qualifies for a short sale? Not all sellers qualify, you can understand why some sellers might wonder if a short sale could be right for them when their home won't sell at the price they had imaged. But in truth it can create more problems than it solves. I'm working with a seller that has fallen on hard times. They have submitted a letter of hardship that explains why the seller can not pay the difference due upon sale. This seller has submitted a copy of two years tax returns and financial statements to show they have no assets. Additionally, the homes market value has dropped and a BPO (broker price opinion) was ordered to determine value and more importantly to determine if it is worth less than what is owed. Let's say the lender agrees to the short sale, the lender may also be able to issue a 1099 for the difference. Short sales are also dependent upon the lender accepting the buyers offer if the lender rejects the offer a short sale does not take place. Why do a short sale? To avoid foreclosure and the all the costs involved. A short sale will go against your credit as a pre-foreclosure that has been redeemed. In theory this may not effect you as significantly as a foreclosure. My heart goes out to anyone finding themselves thinking about short selling their home, my advise would be always seek legal counsel when you are attempting a short sale a Realtor cannot give legal advice.