2012 will continue to see a lot of homes foreclosed or sold via short sale.  Lenders have gotten up to speed and hired staff to handle the huge short sale caseload.  Lenders are more willing to renegotiate or approve a short sale than ever before.  We advise using an attorney and a Realtor who are very experienced with short sales.  That means a track record of successfully closing short sales.  A short sale is an alternative to foreclosure.  The lender is "short" of getting the loan paid in full.  It does ding your credit, but nothing compared to a foreclosure.  It costs nothing upfront to try and renegotiate your loan or find out if you  qualify for a short sale.

 

On the other hand, if you want to buy a short sale, the advice is about the same. Use a very experienced Realtor.  Only 1 out of 3 short sale listings end up with a successful closing.  A knowledgeable agent can help navigate the long painful process of buying a short sale, but the experience is never fun.  If you have a timeframe you need to be in your new home, don't even consider a short sale.  Short sales are for only those who want a great deal and are willing to try 2 or 3 houses before getting one to closing.