Originally posted by rich, realtor bullsh*t:

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Notice of Default - people who are going to be foreclosed on in 90 days. A short sale means that if a house has $500,000 in liens from two mortgages, but it's only worth $300,000, then you try to sell it at market price, $250,000-$300,000, and you try to convince the banks to cut their loan demands so you can close escrow and pay the realtor commissions and closing costs. Benefit to bank is they don't have to foreclose, which can be costly, since they simply have to sell it anyway after foreclosing - benefit to seller versus foreclosure is less of a ding on their credit and they can buy again in 24 months. You have to establish a valid seller hardship, like somebody lost a job, etc.

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