SHORT SALE VS. FORECLOSURE
There are benefits to a Short Sale not found in Foreclosure
You can control the sale of your house- The bank will extend foreclosure dates once a full offer is submitted along with a full package from the homeowner. A Short Sale with an offer attached give you peace of mind and control over the process. Knowing who is buying your home is the main piece of the Short Sale process most people stress about. In today’s market buyers are backing out of Short Sales for various reasons. This leaves the homeowner without an offer and therefore subject to Foreclosure.
Buying a Home in the Future – Lenders are more likely to lend a homeowner money to purchase a home when there is a Short Sale reported on their credit instead of a Foreclosure. Generally you can re-purchase a home in two to three years after a Short Sale. Under a foreclosure you are five to eight years out before purchasing a home for most lenders.
Credit hit – Generally with a Short Sale your credit takes a hit between 50 and 120 points. Under a foreclosure your credit will be hit 200 to 400 points. This will affect other financing items you may need such as credit limits on credit cards and purchase a car with a loan.
Deficiency Judgments – The Short Sale process gives the homeowner the chance to negotiate away any deficiency. In a foreclosure, if there is a potential deficiency you will be left wondering if the bank is going to come after you or not.