Over the past few years as I’ve worked with home sellers who find themselves in the position of needing to short sell their homes, there is one common mistake that is the most troubling, and unnecessary. This mistake is that many people drain all their savings before deciding to sell a home they can’t afford.

The scenario often goes something like this. One or both spouses get a cut in pay at work, or one of them loses their job. Maybe there is commission based employment, and it has just been harder to make money. All along, they hope that things will turn around, and the house that was maybe a stretch to get into a few years back, is now completely unrealistic to hold on  to for the long term. They don’t want to admit it, and as a result, their savings gets depleted and eventually disappears. Finally, when their bank  account is down to zero, they stop making their house payment, not out of choice but because there was nothing left for a payment.

Maybe a way to look at it would be like a mountain climber, who pre-determines a turnaround time before things get too sketchy up on the mountain. After a certain time in  the day, conditions will be expected to deteriorate just too much to safely continue. Once the clock gets to that turnaround time, the climber heads back,  even though the summit may not have been reached. In the same way, a homeowner who is experiencing a financial shortfall might pre-determine that when their savings drop to a certain level, it’s time to sell the house and move on. This way, they’ll have time to investigate their options, other ways to make money,  or perhaps a loan modification.

Don’t be too emotional when facing a financial shortfall. Take some quiet moments and consider your options. Make investigating your options like your second job.  Many people have successfully been able to obtain good loan modifications with their lender, that can definitely be worth a try. You can still short sell your  house while you have money in the bank; you don’t need to be down to zero to do a short sale. I’ve never met anyone who is glad they spent all their money on  house payments before finally deciding to take action. Start early, when you start sooner you’ll be done sooner and you’ll be glad you took action.