Before a seller thinks about doing a short sale, be aware of these four items and know the impact they will have. They may determine whether or not you want to consider pursuing it.

Seller must prove to the bank that they have a bona fide hardship - If the bank knows that you can make the monthly mortgage payment then they will expect you to make the payment.

Your credit score will tank - When a bank performs a short sale, this action is recorded with all three of the major credit bureaus (Equifax, Experian and TransUnion). The notion in your credit will show that the mortgage was terminated in a short sale.

You may be limited on your ability to purchase another house - If you sell a property via a short sale, you will not qualify for a Fannie Mae financed loan for two years from the date your home was sold.

You may owe taxes on the amount the bank forgives - Banks use to send a 1099-C to any homeowner for the amount of the deficiency which is the difference between the selling price and the balance of your mortgage.