Short sales are a seemingly permanent fixture in today's market, Lake Michigan real estate included. A short sale is when a property is sold and the lender agrees to accept a discounted payoff. It's considered a reasonable alternative to foreclosure but contrary to what homeowners might think, it also has its risks which may be worth considering before making any final decisions.
Your spotless credit will take a hit. A short sale is still looked upon as a delinquency since you were essentially unable to pay back a loan and are therefore a financial liability. On the plus side, if you maintained good credit before the short sale occurred then your credit score won't be affected as much.
The remaining balance may still be your responsibility. Banks in many cases will usually try and get the borrower to sign an agreement stating that they will pay back whatever the difference is between the amount left on the loan and the price it sold for. Hiring an attorney or talking with the bank can help in possibly having this agreement removed.
The window of recovery is small. Generally foreclosures are a drawn out process that can take several weeks, thus allowing you time to recover. A short sale on the other hand will force you out in a much quicker amount of time.