With the current state of our real estate market, there are some unfortunate people who owe more on their house than it’s currently worth. If you are having trouble making your monthly mortgage payments and are thinking that loosing the house to foreclosure is your only option, there is another way. . . a Short Sale.

It is very expensive for a bank to foreclose on a property. For that reason, many banks are willing to allow you to sell your house for less than the mortgage, forgive the remaining debt (and pay your real estate agent’s fee) as long as you are able to show that you have a financial hardship and foreclosure is the bank’s only other option.

Although Congress is working on changing this, currently the IRS considers any money forgiven in a short sale situation as income and it’s taxable.

Short Sales take more work and time, but they can be a win/win situation - you get out of a bad financial situation and the bank lessens their losses.