For the vast number of Sellers in the Central Florida market place who are in need of selling their home before the Bank forecloses, there are options available. Before the bank take ownership, many home sellers are exploring the “Short Sale” option to avoid a damaging bankruptcy on their credit report.  Short sales have been around for quite some time but lately they are popping up everywhere due to the current foreclosure meltdown.

Is a Short sale right for you? Before a bank considers short sale as an option, the seller must be a minimum of 2 months behind on payments.  With the help of a Realtor, you can then negotiate with the bank the terms of a Short Sale.  Banks will typically take a 20% – 25% write off on the loan to unload the property. Make sure everything you negotiate with the bank you get in writing. You want to ask for loan forgiveness for your portion of the loss. Keep in mind that the loss on this loan can be considered taxable income which the bank will file with the IRS. If you do not specify up front who will be responsible for this loss, you may find yourself with a hefty IRS bill.

Plead your case. A hardship letter is the best way to put a human face on your specific case. The bank only cares about its losses so you will need to stand out in the crowd of short sales. You also want to stay in touch with the Bank. Let them know of your willingness to cooperate with them. Keep in mind that the Bank does not want your house. By working with the Bank and your Realtor, you will be able to find a workable solution that should get your home sold.

Now a Short Sale my seem like a way out of a bad situation, remember that there are no guarantees. You may still be required to pay back part of the loss or the IRS for capitol gains. But it is a way to get the weight of a Mortgage of your back.