Why short sales? When that notice of default arrives in your mailbox, and you realize that you don’t have enough money to pay off the mortgage, the first initial thought is to give up.

What’s the point of doing a short sale when a foreclosure is easier, you can stay in your home longer, and either way you don’t receive any revenue?

Letting your home go into foreclosure is like telling the bank that you don’t want to try anymore.

By foreclosing, the banks lose thousands of dollars trying to clean up the house, list the house, and pay closing costs. Many REO homes are trashed because the previous owners have stripped it clean.

By doing a short sale, you are essentially helping the bank out. You are cooperating with them so that you help find the buyer, you help to make sure the deal closes, and the bank doesn’t have to do any of the sale themselves.

By helping the bank, the bank will look favorably on your credit score. Foreclosures can kill your credit around 300-350 points, but when negotiated correctly, a short sale can just be a small ding written off as “PAID AS AGREED/SETTLED.”

There is a way out of this financial crisis if you do the short sale correctly. Build a cooperative relationship with the bank and they will cooperate with you.