If you are having trouble paying your mortgage, you may think foreclosure is one of the only options left, but that may not be the case.
There is another tool that could help you save your credit, even if you can't save your house, it's called Short Selling.
It's not the best option out there, but short selling is better than a foreclosure. If you've never heard of Short Selling you are not alone, many realtors do not even know about it, but Trish Acreman does.
Trish Acreman is a Conroe realtor who has experience with the Short Selling.
"Short Sell is when a bank is willing to accept what you owe or less as payment in full and you walk away from the home with your credit intact," she said.
In some cases banks will agree to let a home be resold for 82% of the loan value. The homeowners walk away with no proceeds from the sale, but they are relieved of the burden of paying for a home the can no longer afford.
It takes a realtor to help get you into a short sale because your home must be listed for sale before a bank will agree.
Acreman said, "Their first step is to call a realtor and ask if they are experienced in short sale and if they are not can you refer me to someone who is."
Not every one facing a foreclosure will be able to short sell their home. Banks decide if home owners are financially unable to pay a mortgage. Short Sales are typically only available to anyone who is at least 30 days behind on their mortgage.
Realtors say the process is easier on a home owners credit score than foreclosures.
"A foreclosure, I don't want to quote numbers, but it can hit your score a couple hundred points, a short sale will hit under one hundred," said local realtor Greg Ward.
If the bank agrees, the home owner must stop making mortgage payments, but continues to live in and take care of the home until it is sold.
If you're buying a home, there's an incentive in asking about Short Sales, because the price of a Short Selling home may be below market value.
Another advantage for sellers, it costs nothing to do.
"The lender, or the bank, or financial institution will absorb the cost to sell your home," said Melissa Barber a Montgomery County realtor.
Short Sale homes can only be on the market for a couple of months, but realtors say they typically move in that time because they are usually priced below other nearby homes for sale.
But remember, it's not an easy process, the home owner, the banks, the realtor all have to be on board and all the forms must be filed exactly, and it takes time.
The Texas Real Estate Commission teaches courses on short selling and more realtors are becoming familiar with the process.
