If you are currently living on the mountain in Rhododendron, Welches, Government Camp or Brightwoodand are considering a short sale, what should you do first as a seller? If it were me I'd pick up the phone and call either my tax preparer/cpa or a good attorney.

First you need to know your credit will be dinged for several years with a short sale. Beyond that, there are the two things you need to be aware of:

1. A seller can be pursued by the lender, after the sale of the home, for the repayment of debt, that is unless your paperwork from the lender specifically says the debt is forgiven. Many lenders will have you sign a promissory note to repay the debt or some other paper saying they can pursue that debt after the sale.

2. The lender then sends a document to the Feds triggering the IRS. They may require you to pay tax on the unpaid debt. The tax bill cometh. You will need to keep your paperwork from the lender showing that you signed a promissory note or other paperwork saying the debt can be pursued to avoid paying those taxes on the debt.

TALK to your accountant or advisor to be sure you are doing the right thing!

Be sure to take these two items into consideration when considering a short sale. You don't want any surprises!