Why Negotiate a Short Sale Instead of Foreclosure?

For many homeowners in financial distress and behind on their mortgage payments, foreclosure on their home may appear inevitable.  The truth is, there are viable options for avoiding foreclosure and the pros of a short sale are definitely worth looking into.

Short Sale vs. Foreclosure

Here are a few facts about shorts sales you may not be aware of:

• A homeowner who loses a home to foreclosure is not eligible for a Fannie Mae loan for five years. With a short sale, a homeowner will be eligible for a Fannie Mae mortgage in only 2 years.
• A real estate investor who allows a property to go into foreclosure won’t be eligible for a Fannie Mae loan for 7 years. With a short sale, an investor becomes eligible for a Fannie Mae backed loan in only 2 years.
• A foreclosure can cause a property owner’s credit score to drop as much as 250 – 300 points and will affect their score for over 3 years. With a short sale, only late payments will show and after the sale is completed, the mortgage is generally reported as “paid as agreed,” “paid as negotiated” or “settled,” which lowers the score as little as 50 points.  The effect of a short sale is usually only 12 to 18 months compared to 3 years with a foreclosure.
• Homeowners that go through foreclosure will have a public record on their credit history for up to 10 years. A short sale, however, is not reported on your credit history. The loan is reported as “paid in full” or “settled.”
• A foreclosure is public domain and many employers are requiring a credit check on prospective applicants. A foreclosure is probably the most detrimental item on a credit report and could jeopardize any possibility of employment. With a short sale, there is no record of it reported and therefore no threat to employment.
• Employers also have the right to actively check the credit for all current employees in sensitive positions. A foreclosure can be reason for immediate reassignment or worse – termination.  Since short sales are not reported, there is no threat to employment.
• When a homeowner goes into foreclosure, their home will have to go through an REO (bank owned) process if it fails to sell at auction. Typically, this results in a lower sale price the longer it sits on the market. Ultimately, this can lead to a higher possible deficiency judgment. With a properly managed short sale, the home will be sold at a price closest to market value. This is better that an REO (bank owned) sale and can result in a lower deficiency.

As you can see, there are many good reasons to avoid going into foreclosure on your home with a properly negotiated short sale.

Avoid Foreclosure Short Sale Expert Charlotte NC

When you hire a Certified Distressed Property Expert® (CDPE) such as Charlotte real estate broker, Leigh Brown, you have the most experienced and qualified help available. Leigh is the leading real estate, investment property, short sale and avoid foreclosure expert in the Charlotte -metro area.

Leigh has years of experience in the real estate industry. She fully understands how to negotiate a short sale and will walk you through the short sale process every step of the way. If you or someone you know is facing possible foreclosure on your home or investment property,  you owe it to yourself to enlist the services of Certified Distressed Property Expert® Leigh Brown.

You can reach Leigh by filling out her online contact form or call (704) 688-5005, or toll free at (866) 440-7136.

Leigh can help!!