Short Sale vs Foreclosure
There are a number of solutions for homeowners facing foreclosure. They range from a loan modification to the worst case, foreclosure. In between this spectrum of choices is the “Short Sale”. The difference between a short sale vs foreclosure is massive to the homeowner but many homeowners are not aware of the devastating impact of a foreclosure on their future.
Many homeowners are downright mad at their lender for getting them into the financial problem they are in with their pending foreclosure. In most cases homeowners have a right to be angry. But this anger should not blind you to the options you have to getting out as best as possible from your predicament. Lenders are in the business of making money not making friends.
If we look at the benefits of a short sale vs foreclosure to the homeowner, we see the following major benefits of a short sale –
Minimal credit score and credit history impact by doing a short sale versus maximum damage by having a foreclosure on their record.
Homeowner may be able to stay in the property for an extended period while the short sale is being processed versus risking an eviction in the foreclosure process with as little as 24 hours’ notice.
Homeowner may receive money from his lender (Cash for Keys Program) for leaving the property by doing a short sale versus getting nothing except an eviction in the foreclosure process. So you can start to see the differences in the short sale vs foreclosure situation.
If a homeowner is current on his mortgage but elects to do a short sale, he may be able to buy another home in as little as two years versus having to wait 5 to 7 years if he allows the foreclosure to happen.
Possibly but most importantly, is that in a short sale, the homeowner will likely be able to avoid a deficiency judgment versus knowing that he will certainly be getting a deficiency judgment in a foreclosure which can be collected later by garnishment of his wages.
The not knowing what is going to happen in a foreclosure is an emotional toll that breaks many families apart; this is not the case in a short sale as the homeowner is aware of what’s happening with the lender in each stage of the short sale.
In summary, don’t let your emotional hatred of your lender blind you from doing what is in your best interest and in a short sale vs foreclosure, the short sale always wins out! If you are interested in considering a short sale with your home, please give us a call or fill in the short contact information below.