When attempting to sell your home, you will be much better off if you stage your property. This means that making sure that both the exterior and interior of your house are looking their best.

On the exterior, remove dead plants, mow the lawn and pull the weeks. On the interior, declutter, remove most personal items ? like photographs ? and makes sure the house is clean. In both areas, touch up the paint as needed.

These steps will help you bring in better, higher offers and could actually make the difference between having to go through a short sale and being bale to sell your home as a regular sale. If you can avoid the short sale scenario, your credit will be much better off and you may even be able to put some badly needed cash in you pocket. It may also prevent your lender from suing you.

Short sales do not always go smoothly. There are a number of things that can happen during the process that can extend it or even lead to foreclosure. Knowing what these issues are can help you avoid them and can prepare you so that you have a back-up plan if you need it.

A large percentage of short sales fall apart before escrow is ever opened. And once escrow is opened, they can still fall apart for a variety of causes.

Many sophisticated buyers that target short sales know that they can make offers on multiple properties at the same time in order to increase their chances of success. This is the one area of the real-estate market where this practice poses almost no financial risk to the buyer. That is because they buyer can walk away from their offer at any time up until the bank accept it.

For this reason, it is always a good idea to get as many back-up offers on your property as possible. That way, if the bank approves a short sale dollar amount but the buyer has already canceled the purchase, you can move on to the next best qualified buyer to make an offer. Make sure that your real estate agent is keeping a list of all offers on your property and that the list is organized in such a way that if the first offer falls through, the next offer can be contacted immediately.

Once an offer has been accepted by your lender(s) and you have a buyer in place, your sale can still fall through. Both short sales and bank-owned properties are normally sold in "as is" condition. This means that neither the seller nor the bank will make any repairs to the property. This however does not diminish the buyer´s right to inspect the property. And if the buyer´s inspection goes poorly, there is a reasonable chance that the sale will not go through.

There are a wide variety of issues that turn up in inspections: termite damage, bug infestations, foundation and roof problems. These are just scratching the surface. In the event inspection results show that the buyer will have a large repair bill, the buyer is left with three options. They can proceed with the sale anyway, ask for a reduction in price, or cancel their contract. If the buyer asks for a price reduction, it is up to your lender to approve or deny that request.

Again, these are just some of the reasons that it is important to have multiple offers to purchase the property.

If a property enters escrow and falls out several times, it is likely that the lender will eventually foreclose. Although many lenders will hold off on foreclosure for an extended period of time, they will not allow this cycle to continue indefinitely. Therefore, it is important to do everything you can to make your home marketable. Although it is rare, there are other circumstances in which a home going through a short sale can go into foreclosure.

Most lenders will schedule a foreclosure auction at the earliest possible date. Once you have received your first notice of delinquency, you can be assured that the wheels are in motion to schedule that auction. Depending upon where you live, the process of going from being merely delinquent to having your home foreclosed upon can be a matter of weeks or months. Consult an attorney in your area for detailed information.

Once the foreclosure auction is scheduled, your lender has the right to postpone or cancel it. This process usually involves multiple people in multiple departments within the lender. Although your lender may have agreed to a postponement, it is not unheard of for mistakes to occur and there are a number of cases in which people have been foreclosed upon even though a short sale amount has been agreed upon and the property is in escrow. This is another reason to complete the process as quickly as possible.

In order to mitigate these risks, your real estate agent should be in touch with your lender on a regular basis. If there is an auction date scheduled, your agent needs to be aware of it and working with your lender on a postponement. Some lenders will not postpone auctions until the day before they are scheduled. In these circumstances it is very important that your agent be diligent in their follow-up. Even if you and your agent do everything correctly, a mistake on the part of the lender is impossible to prevent.

To put it bluntly, backing out of the sales process is self destructive and is likely to lead to compounding your financial difficulties. Once you sign a listing agreement on you home, you have entered a legal agreement. Once an acceptable short sale arrangement is made with your bank, and your real estate agent has brought you a buyer that agrees to the purchase terms you have laid out, your agent is entitled to commissions even if you back out of the sale.

If you accept a written offer on your property and then decide to back out of the sale, the agent representing the buyer is also entitled to commissions even if you back out of the agreement. If the buyer has paid for inspections of your property or incurred other costs, the buyer may be entitled to recover those costs as well.

While it is less likely that your own agent will sue you to recover commissions owed, it is not unheard of. It is quite possible that an agent representing a buyer will sue you to get paid. It is equally possible that the buyer may sue to recover any costs associated with the purchase of your property.

It should also be noted that your lender(s) will be provided with copies of any offers on your property and they will monitor the progress of any sale. If you withdraw from the sale, the eventual response will most likely be a foreclosure on your property. Any agreement with your lender(s) will become null and void at that point. This means that you will be liable for the full amount owed on the property and your lender(s) may file suit against you to recover this amount plus their legal costs. Depending upon where you live, lenders may have several years to file against you. That means that even though you may be out of money today, if you start making money two or three years from you, your lender may be able to take that money from you.

For all these reasons, in most circumstances you will be much better off by completing a short sale of your property and putting the issue behind you provided that your lender has agreed not to sue you to recover any more money.

Many people who attempt to sell their homes in a short sale begin making demands on the buyer. They may ask for additional time in their home, or to utilize a portion of the property and to store their things while they look for new accommodations. In most cases these demands are unreasonable, can lead to a cancellation of the sale, and may compound the financial problems of the seller.

Once you have entered into a purchase contract to sell your home, you have legal obligations to perform under that contract. When escrow is opened on your property, the buyer deposits money and escrow charges begin accruing. If the sale falls through because you fail to meet your legal requirements under the purchase agreement, the buyer could wind up having to pay escrow fees that range from a few hundred to several thousand dollars. The buyer would be entitled to sue you to recover those charges.

Furthermore, if the agreement falls through because you failed to adhere to the terms of the purchase agreement, there is a reasonable chance that your lender will foreclose on the property and any agreement not to sue you will become null and void.

It is in your best interest to ensure that the sale goes smoothly.

Yes, commercial real estate and rental property can be sold in a short sale. The same rules apply as with a short sale of a primary residence. Specifically, you have to be able to show that you don´t have the assets to continue to make your payments.

Possibly. Specifically, if you are selling rental property in a short sale, you may be responsible for security and other deposits that you have collected from your tenants. It is also possible that a lender will agree to a short sale but because you have other assets, they will require you to bring some money to the closing table to complete the transaction. All of these details should be worked out with your lender prior to closing the sale.  

Unfortunately there are a wide variety of scams that target troubled homeowners. There are things you can do to minimize the chance of being caught up in these.

First of all, don´t pay anyone an up-front fee to negotiate with your lender. This is a process that you should be able to begin yourself by contacting your lender directly.

Secondly, legitimate credit counseling services should not be charging you for any services that they provide. If you are looking for a credit counseling service, try to find one that is non-profit. Make sure that you get references from past clients. And if they try to charge you a fee, don´t agree to pay it. If the service is legitimate, they should be willing to help you anyway.

Third, no legitimate real estate firm will charge you an up-front free for listing or selling your house. Real estate agents and the firms they work for are compensated by the approving banks on a commission basis. This compensation is paid once the sale is completed.

Fourth, don´t fall victim to a mortgage fraud scam. Many of these ask the homeowner to sign over title to their property with the promise that this will get the bank off their back and that the person you are working with help you keep your home. If anyone asks you to sign over your property, you should contact the police and report them.

Fifth, because of the state of the housing and job markets nationally, a lot of people are being lured into short sale scams in which an attorney agrees to work directly with your bank to get an approval on your short sale. At the same time that the contact is occurring between the bank and the attorney, your house is listed by the purchasing party with a real estate agent. Their goal is very simple. Get the bank to agree to a low price for the property and then sell the property at a much higher price. Ideally, both sales will close on the same day.

This type of scam does a couple of things. First, if the attorney´s firm is able to sell the home at a much higher price, that firm may actually be getting more than enough to have paid off your loan. At the very least, it means that the amount of money available to pay back your lender is significantly lower than it could have been. Not only does this impact the credit record of the seller, it may also prevent the seller walking away from the sale with a little bit of money in their pockets.

This is a gray area of the law, but here are numerous articles on this approach to short sales which state that real estate agents involved in such scams may be involved in licensing violations. Those same articles point out that this type of activity may be considered fraud against the approving bank; something which all involved parties can wind up in serious trouble over.

The thing to keep in mind here is that if an idea sounds too good to be true, then it probably is.