Nobody wants to give up their home, but in today's economic climate, more people are facing foreclosure than ever. If you've fallen behind on your mortgage or are struggling each month to make the payments, you may be facing the loss of your home. If you are tempted to walk away from your property, consider a short sale as a possible alternative. You'll put your home on the market and sell it for less than what is owed on your mortgage loan in hopes that your lender will accept the sale price as payment in full on your outstanding debt.

Consider a short sale if:

• You want to avoid the social stigma or embarrassment of foreclosure

• You are behind on your mortgage by at least sixty days

• You want to get rid of expensive, monthly mortgage payments

• You want to minimize the damage to your credit history

• You are hoping to avoid bankruptcy

• You don't want to go through the lengthy foreclosure process

• You would like to be able to purchase another home within the next two to three years

While both short sales and foreclosures negatively affect credit scores, the damage is considerably less with a short sale and usually falls off after 24 months if you were only a few months behind on your mortgage. Some lenders will allow you to take out a new mortgage at a reasonable rate within two to three years of a short sale. Foreclosures usually prevent you from getting a mortgage for six to ten years.

If you're considering selling your house at a loss to avoid foreclosure, negotiating an acceptable sale price with your lender is crucial. Not all lenders will allow short sales, and others may have very specific guidelines for when and how you can sell at a price lower than the outstanding debt. Talk to the lender and be sure you understand what is and isn't acceptable. Having an attorney experienced in short sale foreclosures review your mortgage agreement can also help.

Even with this knowledge in hand, keep in mind that a lender can turn down any offer you receive. Some lenders may drag their feet, hoping a better offer will come through on the house. Unfortunately, a buyer could walk away if the wait is too long, and the lender may turn down an offer and immediately start foreclosure proceedings after letting you wait for a response. Using an attorney experienced in negotiating these kinds of home sales will help with the process. An attorney will work with your lender's loss mitigation department, outlining the advantages to the lender of accepting a short sale and ensuring you're getting the best possible outcome.