If it's done right, everybody wins in a "short sale," where the home sells for less than the seller owes on the mortgage. The buyer gets a bargain, the seller avoids foreclosure, and the bank escapes with a manageable loss. But the process can drag on for months, and only about 25 percent of offers get accepted by banks. Here are some ways to make the process as painless as possible.

Vet the other guy's agent. Make sure the seller's agent is experienced with short sales, since that person will do the haggling with lenders.

Make a smart bid. An extreme lowball offer rarely works, as banks still have the option of foreclosing and selling the home. Short-sale specialist Troy Huerta, of San Diego, recommends making an offer that's no more than a 10 percent discount to recent comparable home sales in the neighborhood. Also: Buyers should get preapproved for a mortgage before they bid.

Be patient. It takes two months on average for banks to even respond to short-sale offers-getting to actual closing can take several more months. Would-be homebuyers making an offer should make sure they have a rental option or other place to stay while the process plays out.

For Sellers

Prove hardship. Banks won't approve short sales for investors or homeowners simply because they're underwater on their mortgages. The seller needs to prove hardship by demonstrating legitimate problems like recent job loss, medical bills or divorce. Rita Driver, a short-sale specialist in Memphis, asks clients to submit handwritten hardship letters in hopes of persuading hard-hearted mortgage lenders.

Start early. Sellers can shave weeks off the process by letting lenders know as soon as they consider a short sale. The banks can get the paperwork started and may even provide a ballpark estimate of what sale price they would accept.

Put skin in the game. Because lenders are taking a loss, they want to see the seller sacrifice as well. Offering the bank a payment as small as a couple of thousand dollars on top of the buyer's offer will sometimes move a bank to approve a short sale.