A lot of people have written to me expressing concerns about doing a short sale.

Three major concerns actually:

1. I will just have my Realtor handle my short sale.

That can be a big mistake.

Every Realtor today claims to be a short sale expert. Yet every day many people get in touch with me. "Richard, our Realtor isn't selling the house. It just sits there on the market and meanwhile I am running out of money and don't know what to do."

Someone else told me "my lender won't approve my short sale. I don't know what to do."

You need information about how to do a short sale. I recommend a specialist firm do the short sale for you. And either list the house with a real estate agent, who will sell the house, or do the nine day house sale. You can have a real estate agent do the nine day house sale for you if you want. But in any event, I recommend you work with a specialist to handle short sale negotiations and an expert to sell the house.

As it works out, you won't pay for these experts. They get paid when the house is sold. The buyer brings the money to the closing table, and the buyer's money pays your experts.

So it costs nothing to get expert help. The best short sale experts may require you to put up a few hundred dollars but the bulk of their payment comes from the buyer at closing -- and not out of your pocket.

2. I don't want to do a short sale because I can't handle the tax bill.

I have written about this extensively. You won't face a tax bill from the IRS if the house if your primary residence. Or if the loan is a non-recourse type, which many loans are if you used the loan to purchase the house. Or if the amount you owe exceeds the amount of your assets.

Most people will qualify under one of these three tests and won't face an IRS tax bill for a short sale. Your state may have different laws and as always you should consult a competent qualified tax advisor. But most people will not face a tax liability from a cancellation of their mortgage, so this is not an issue.

3. I think I'll just walk away. I can't deal with this anymore.

I can relate! But you are better off working things out with your credit than just abandoning the house.

There are two parts to a short sale. One part is negotiating with your bank. The other is to get the house sold.

Here is what I suggest: have an expert negotiate your short sale for you (unless you want to do it yourself.) And have a real estate agent who is an expert at selling houses do the actual short sale.

More info on your stop foreclosure information search:

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