Short Sale Vs Foreclosure

Know Your Options - Short Sale vs Foreclosure

If you're behind on house payments you may be facing the dilemma of doing a short sale vs foreclosure. Losing your property to foreclosure on account of an inability to keep up with your monthly home loan payments is one of life’s most unpleasant experiences. It's also an event that keeps on impacting you long after your residence is history by damaging your credit scores. The sad thing is, almost all people cannot be completely positive that they will stay safe from foreclosure since they can’t predict the unexpected. Incidences for instance serious illness, a major injury, divorce or job loss can happen to any person. Therefore it’s an excellent idea to know the available possibilities should the worst happen. Below we will discuss the advantages and disadvantages of a short sale vs foreclosure.

Short Sale vs Foreclosure | Short Sale Benefits

1. You avoid foreclosure - many people agree that a foreclosure is the worst possible thing for your credit.
2. You may be able to qualify to by a home in as little as 2 to 3 years
3. You do not have to make any mortgage payments, unless you choose to make them.
4. You may meet the new homebuyers, and feel good knowing who will be purchasing your house.

Short Sale vs Foreclosure | Short Sale Disadvantages

1. Short sales can take many months and can be a very frustrating process.
2. The bank will be looking at lots of your personal information.
3. Typically your home will be listed with a REALTOR while the short sale taking place, which means it will have to be in show condition and you will likely have people walking through the home at various times.
4. Your credit will likely be affected and the derogatory marks can stay there for up to 7 years.

Short Sale vs Foreclosure | Foreclosure Benefits

1. You don't have to make any mortgage payments.
2. You get to stay in the home until the foreclosure auction takes place.
3. You won't have any buyers walking through your home.

Short Sale vs Foreclosure | Foreclosure Disadvantages

1. It can be embarrassing to be foreclosed on and the bank will likely post a Notice of Public Sale on the front door.
2. Your credit will take a huge hit. Foreclosure is one of, if not the worst things for your credit.
3. According to Fannie Mae guidelines, you will likely not be eligible to buy another home for at least 7 years.

If you are facing a financial dilemma and are evaluating a short sale vs foreclosure on your home make sure that you know all the facts and speak with a real estate professional about your situation. There can be many other options that you have in addition to short sales or foreclosures, but only by speaking with a professional that has done a tremendous amount of foreclosure and pre-foreclosure real estate will those options be determined.