Pursue short sale before deed-in-lieu

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Q: I just listed my home for sale as a short sale. But a friend of mine just mentioned the deed-in-lieu of foreclosure to me, and now I’m thinking I should have gone that route. What do you think?

A: Your scenario is not an either/or situation. To anyone who owns a home and owes more on it than it is currently worth — that state of affairs we now curiously call being "upside down" or "underwater" — a deed-in-lieu seems like the best of all situations for sheer speed of closure and minimal effort required.

With a deed-in-lieu, you quite literally hand the keys back to the bank. The bank agrees to take the home back, and you sign the deed over to the bank.