You are behind on your Mortgage payments and you know that  you're not going to be able to play catch-up before the bank begins the dreaded  foreclosure process. If there are no other options for you at this point, you  may consider arranging a short sale instead of going through the stressful  experience of a foreclosure.

Short sales occur when a homeowner is in default on their  home loan, but the property has not yet reached the foreclosure stage. These  are sales in which the lender and the owner both agree to sell the property for  less money than is owed to the bank.

A short sale can do much less damage to one's credit rating  than an actual foreclosure can. This is a huge benefit for sellers because the  black mark of a foreclosure can seriously affect a person's ability to rent  property, obtain credit cards, or be approved for loans of any kind.

In addition, short sales can help a seller to feel more in  control of the situation. While it is inevitable that he or she will lose their  home, they are pro actively trying to find a solution that will satisfy all  parties involved. By taking charge of the selling process prior to a  foreclosure, a seller can feel more at peace and empowered during an extremely  difficult time.

Short sales also benefit buyers of these properties because  they can purchase a home for much less than its market value, and end up with a  fabulous property for a steal.

Lenders benefit from short sales because they are able to  avoid the foreclosure process, which is both costly and time consuming. They  may also get more money from a short sale than they can at a foreclosure  auction, and they don't have to worry about having a house sitting on their lap  and losing value every day.

Short sales can in fact benefit all parties involved, but  there are many short sales that never reach closing. The main reason for this  is that a short sale is a transaction that involves more than just the buyer  and seller; the lending company must approve the sale before it can go through.

Getting approval for a short sale is difficult because  lenders want to recoup as much of their money as possible. A lender must  determine if the amount they are being offered is more than they are likely to  get at auction. If they believe they can get more money by proceeding with the  foreclosure, they will refuse the short sale.

Waiting for the lender to approve or refuse the short sale  can be an exhausting process for everyone. On average, it can take over a month  for the lending company to even respond to an offer, which leaves buyers and  sellers in a terrible state of limbo. In fact, many buyers walk away from short  sales because they can't take all the waiting and red tape that is involved.  After all, a buyer could make an offer, hand over a deposit, wait six weeks,  and then have their offer be flatly rejected. Unlike regular Real Estate sales,  lending companies often don't even respond with a counter offer; they simply  refuse the sale, and leave both the seller and the buyer back at square one.

Because the short sale process is not without its  difficulties, many buyers don't feel that it's worth their time looking at  short sale properties. For those who can stomach the waiting involved, short  sales can provide a buyer with a great deal on a home, and a positive solution  for the seller.

PorchLight Real Estate Group combines local market knowledge with cutting edge marketing skills. For more information on Denver CO real estate or to do a  search for Cherry Creek real estate, visit us online at PorchLightGroup.com.