So you are in a short sale and possibly facing foreclosure. Maybe you lost a job, got in an accident or maybe got in above your head. Don't worry and stress yourself out. Thousands of homeowners across the nation are facing the same situation. This guide will show you what you can do to help get your home sold, find a new home and get back on track.

First thing that you need to do is take a deep breath and tell yourself that you can and will get through this. I know what you are going through as I have been through this myself. My mother's home was foreclosed upon almost two years ago. She became very ill and was hospitalized for five days. After she was released from the hospital, she couldn't go back to working full-time for over six months. I was working 14-16 hours a day, 7 days a week to keep food on the table and the lights on while paying my own bills.

I went through the same thing you are going through. You are getting hundreds of letters, postcards and flyers in the mail, getting phone calls left and right, even having people knocking on your door offering to buy your home and even giving you some cash to move out. The lender is calling about your payment(s) but never offering to help. Don't worry. Here is where things get better.

If you can't refinance or your lender won't negotiate the terms of your loan for a forbearance, modification of the terms of your loan, etc. (see my blog, "General Options to Avoid Foreclosure") then the only way to get out of this situation may be to sell your home. If you can sell it before it is foreclosed upon then you can get back on track within a few years. This can be accomplished. My team and I have done it successfully for many people just like you.

First, you need to choose an agent that specializes in short sales and foreclosures. Don't just assume that all agents are specialists because they say they are. Interview a few agents. Ask how many short sales and foreclosures they have done. If possible get a list from them with names and phone numbers. Call those people and see how their experience was with the agent, NOT the lender(s). After doing this, then select the agent you want to work with.

Once you have an agent to help you with the sale of your home, you will need to gather some paperwork for the agent. Typically you will need your last two paycheck stubs, two months of bank statements, a financial hardship letter (your agent can assist you with this) and a letter authorizing the agent to work on your behalf. The agent will also need you to sign a listing agreement and the standard disclosure forms. They will also have to fill out a Broker Price Opinion (BPO). This is basically what the agent believes the home will sell for (not necessarily what the market value is).

Once the agent has all the paperwork, they can submit everything to the lender to get the process started. It may take a few weeks for the lender to get to your home since there are a lot of homes in trouble, just as yours. In the meantime your agent should be marketing your home, holding open house and doing their very best to get an offer.

Please understand that in a short sale you cannot receive any money from the sale, as the lender is paying for everything by taking a loss on your home. They will typically pay all of the commissions, back taxes, escrow and title fees. Some lenders may even help the buyer with closing costs. Typically lenders however will not pay for termite inspections, repairs, home warranties, etc.

Also a quick note for those of you facing foreclosure: if you get an offer, please resist the urge to try and make a profit from the sale of your home. Many people have lost their homes to foreclosures by turning down offers and trying to get more money out of the sale. I know several people who have had this happen, only to regret it when they could have had something rather than nothing.

Once an offer is received, the agent will review it with you and send it off to the lender for approval. Sometimes, and this is where it can get nerve-wracking, it can take weeks or months to get approval, depending on the lender. Don't worry. Lenders are having a hard time keeping up with all of the short sales and foreclosure on their books. They don't have enough staff or people trained in short sales so it takes a while.

I know you are thinking that if it could take months, the lender may foreclose right? Not necessarily. If the lender is holding things up, which is 99% of the time; they will grant 30 day extensions as necessary. That means that they will not file the notice of trustee sale for an extra 30 days. I have had several homes that needed two to five 30-day extensions before the banks approved the offer.

Also, just because you have one offer into the bank, doesn't mean your agent shouldn't be out getting more. I don't stop taking offers, even backup upon backup offers until we are closing escrow. To some this may be unethical, but sometimes, however rare, the sale may fall through. By having several backup offers already into the bank, it can be as simple as having the bank accept a new offer and doing an escrow amendment showing the new buyers and terms.

So now you have your home sold. You need to find somewhere to move. Your agent can assist you with this as well, or if you wish you can find someplace to go on your own. It is best to consider renting, and staying in a rent range that is comfortable, even if it means downsizing for a while. Your goal right now is to get back on your feet, then worry about buying another home later. Do some budgeting and figure out with what you feel comfortable paying. Be realistic. Don't expect to get a three bedroom, two bathroom home for $1,000 a month if they are all renting for $1,500 a month. Maybe you need to get a 2 bedroom and a storage space or use the garage for all your stuff.

Once you have found a new place to live and have moved in, relax. Take a month or two and just take some time to de-stress. I know it can be a tough experience as I have been there. Once you get settled and take care of everything, come back and read my blog: "how to clean up your credit after a short sale", which I will post in a week or so.

Charles Tharp