We're in contract with our agent and have been trying to short sale our house since Nov '08. We've lowered the price so low that I don't know if our bank will accept it even if we get an offer. The forclosure process has already started and we've been given an auction date in early June.

I've recently called my bank wanting information about a Deed In Lieu and was first told we didn't qualify, but today I called the bank again and was informed that my loan IS in Deed In Lieu status. I'd like to proceed with the Deed In Lieu, but don't know what to do about my agent. It sounds as if she wants to proceed with trying to get an offer, but we're getting so close our auciton date that I fear if we wait to complete a short sale we'll end up getting foreclosed on and miss our chance at a Deed In Lieu.

Can anyone tell me what I need to do from here and how I can broach this subject with our agent? TIA.

Seems like your agent has had 2 years to scoop prospective buyers and sellers from her/your listing.

You need to do what's best for your family & your financial future.

Chrisbee,

Do you understand what a "deed-in-lieu" really is?

This process is simply the senior lien holder (usually the bank) taking title (ownership) to the property instead of going through all the expenses of foreclosing.

The DIL process usually takes 60 to 90 days. The reason it takes so long is the bank that is holding the 1st mortgage has to make sure there are no others junior lien holders and title is clear.If not the bank will not take title. The reason is the junior lien holders will want to much to release their interests and for the bank (1st mortgage) it will be cheaper to foreclose and wipe out junior lien holders (judgments,mechanics liens,2nd mortgages,etc.)

So if you have one mortgage and no other junior liens you could go the DIL route. If you have other junk attached to the title then you need to look at the short sale. In the short sale make sure they cannot pursue you for a deficiency judgment in the future.

Because of late payments your credit is in the crapper anyways.You could stay and not pay the mortgage for free and then let it foreclose and the bank will offer you "cash for keys" to move out instead of having to evict you as a holdover tenant after foreclosure.

No legal advice-good luck.

Chrisbee, get a real estate attorney.
Seriously, the stakes are very high here. You want to assure that your interests are protected. We all hate the added expense, but there are many legal implications to this process. Find a reputable attorney that practices real estate law and listen to him.
It's exactly what I would be doing if I was in your position.

my 2 cents

Chrisbee,
May I also recommend that you speak to a Bankruptcy Lawyer.
There are things available to you that you may not be aware of.
A bankruptcy can keep you in the home for a year or more which will allow you to save the money to move. You are also likely to get an offer from the bank (after the BK and any junior liens are cleared) to modify the loan and keep the home.

There is too much at risk for you not to investigate all avenues.
I wish you the best in a very difficult time.