What is a short sale....

A short sale is a sale of real estate when the lender agrees to take less than the amount owed against the property because there is not enough equity in which the sale proceeds will not payoff the balance of the loan.  If a borrower has been unable to pay the mortgage and both parties (lender and borrower) agree to the short sale then the short sale process can begin.  Not all lenders will agree to a short sale but in order to avoid the high cost of foreclosing on the property, the lender will usually negotiate a short sale.  Having a someone experienced with negotiating with the lenders loss mitigation department can be a priceless benefit during the process of the short sale. 

Who qualifies for a short sale?

 You cant just decide that you are going to sell your property as a short sale.  It used to be that unless you were bhind on your payments a lender wouldn't not negotiate a short sale but now adays there are two reasons that a lender will consider a short sale.  One is if the seller owes more on the mortgage than the home is worth and the other is a hardship.  Either you become unemployed, or a job transfer or possibly reduced income.  Medical emergencies, death or a divorce would also be an acceptable hardship. 

more on the short sale process and what it does to your credit next time.