Wednesday, July 22, 2009

Advantages and disadvantages of a short sale

Windem Real Estate
Get The Wind Behind You!
Moe Navidi
Real Estate Consultant
Tel: (949) 892-7077
Lic# 01753283

Advantages and disadvantages of a short sale

Bad things happen to good people. Please know that you are not alone. It is estimated that more than a million homeowners will be foreclosed before this sub-prime mess ends. The hardest step to make is to realize that you simply need help. The quality of the help you seek will make a difference in the end.

Who is eligible for Short Sale?
Homeowners with adjustable-rate loans who can't make the payments when their interest rates rise;
Some fall behind because of job loss;
Some because of a divorce or sickness.
A lot of homeowners have seen their homes values drop and they cannot refinance because the current home value is below what they need to refinance the entire loan.

What are the advantages and disadvantages of a short sale?
A short sale will be less damaging to your credit score than a foreclosure.
Just try to have a normal life with a foreclosure on your record…it’s almost impossible to rent, finance a car, apply for future jobs.

1-With a short sale, the biggest benefit is that you sell your home and if you don't satisfy the mortgage amount the bank forgive the deficiency. A short-sale is positive for both the lender who doesn't have to go through the process of foreclosing and the homeowner, who may be able to walk away without a huge amount of debt.

2-In most cases, a Short Sale will reduce your credit score by 80-150 points, and it is possible that it may only take you about 18-24 months before you're able to qualify for another mortgage at 'reasonable' rates. When you sell your home via short sale your credit will show late payments and a "settled for less than owed" BUT will NOT show that the home was actually foreclosed

3-If you simply walk away, your house will be sold at auction, and if the amount it's sold for doesn't satisfy the mortgage, you'll be on the hook for the deficiency. And lenders can go after you for the money including attaching liens on other property you own.

4-A Foreclosure will reduce your credit score by 250-280 points, and will require a minimum of 36 months before a mortgage at 'reasonable' rates is accessible, though if not FHA, most conventional programs require 4 years or more, for additional properties even as long as 7 years..

I value you as a client and I hope that you will consider us if you decide to take the next step. I sincerely appreciate the opportunity to be your trusted Realtor and resource. Please feel free to contact me for all real estate and mortgage needs. If you know of anyone else who could benefit from the services I provide, I would sincerely appreciate the opportunity to be of assistance to them as well.


  1. Thanks for sharing this great post ! Your information is very helpful for new homeowner and seller.


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  2. The article has defined short sale in a very simple way. The advantages and disadvantages of this mortgage program have been explained in this write up. Anyways, here it is to be noted that a short sale is an excellent way to avoid the serious consequences of foreclosure. The negative effects of a short sale are much less than the negative effects of foreclosure. If you opt for short sale, your credit score gets reduced by 75-100 points. In short sale, your lender agrees to an offer than is less than the amount of money that you owe in your mortgages.