Suppose you had to get rid of a house because of a job transfer, major illness, divorce, imminent foreclosure or other emergency. In a soft housing market, how would you do it?
Perhaps you'd be fortunate enough to sell relatively quickly at a small discount. But if that's not feasible, there are three other options: a short sale or deed-in-lieu of foreclosure, a strategic default, or literally giving the house away.
A short sale allows a homeowner to sell the home for less than the amount owed on the mortgage. However, the lender's approval is required.