I have heard a lot different aspects of doing a short sale and, to no surprise, some things people have told me conflict with one another. I was wondering if you could clear some things up for me. And I ask these questions in regards to residential property in Oregon.

First, in Oregon to go through short sale do homeowners need to be in default? Or could they consider and talk to lenders about potentially doing a short sale if the homeowners expect that they can no longer make payments on their homes?

Second, do you absolutely need to have a potential buyer when trying to qualify for a short sale? Or can that part be satisfied after being okay-ed by the lender for short sale?

Third, I have read and heard from various sources that in order to qualify for short sale homeowners must meet certain criteria (i.e. the home’s market value has dropped, the mortgage is in or near default status, the seller has fallen on hard times, the seller has no assets)? Do homeowners need to meet all the criteria or is just one of them enough? Also, are there other factors lenders look into when determining if homeowners qualify for short sale?

If you could answer these questions for me, it will be greatly appreciated. Thank you.