• Short sales allow lenders to mitigate debt.Sold Home For Sale Sign on Burst image by Andy Dean from Fotolia.com
  
  In tough economic times, a short sale is an option when you owe more than your house is worth. A short sale is property sold at lower price than valued. In short sales, the lender needs to agree on the reduced price, and an agent who will sell it at a low price is needed. Connecticut law oversees transactions and regulates licensing of certain parties in the short sale process.
  
  

Why Short Sale?

• Short sales are designed to reduce debt. Negotiations with lenders and real estate agents are a must, and the debt in question needs to be negotiated to an acceptable sale price to satisfy the loan in question. The seller will never see the money, as it is divided up between the mortgage holder, the real estate agent and any attorneys involved. Short sale transactions fall under debt negotiation, which is monitored by the Connecticut Department of Banking. Connecticut's licensing laws bestow the agents involved with the legal right to conduct short sale transactions.
  
  

Getting Short Sales Negotiated and Approved

• Negotiations are key. In order for a mortgage lender to accept the short sale, the seller may have to prove economic hardship to get short sale approval. The time to negotiate is when the lender approves the sale and the buyer is waiting to close. You will want to have the following: a letter of hardship, proof of financial situation, the buyer's offer, a broker's opinion on the property and proof of any work needing to be accomplished. Under Connecticut law, the lender then has the right to refuse the sale or accept it and relieve the owner of his debt with the lender.
  
  

Connecticut Regulations

• In Connecticut short sale transactions, the involved parties are mostly professionals needing state licensing to perform their jobs: attorneys, debt negotiators, real estate agents and banks/mortgage lenders. It is through their respective licensing that Connecticut law governs these transactions as legal. Most of the debt negotiation and transaction particulars are between the involved parties. Short sales and property transfers need to be documented with the state, as does any legal real estate transaction in Connecticut.