by Thomas D. Richards, Lawyer Referral Service Panelist
A Short Sale is when you have found a buyer for your home, but the price is not enough to pay off the lender and all other creditors/lienholders on the title. The lender must approve this option and will need an appraisal. You will still need to fill out financial statements to show that you have a hardship and cannot afford to keep the home. If approved, the sale will then go through and you have effectively sold your house and the lender has accepted less than a full payoff on your loan. You will normally not have any deficiency balance left to pay and you will be totally out of this mortgage loan. However, it will likely be reported to the Credit Bureau by the lender so may affect your ability to get another mortgage loan for a period of time.