A foreclosure has a much higher impact on your credit score than “settling” with the lender(s) by completing a Short Sale. While both affect your credit, most experts agree that when done correctly the damage is substantially less than completing a short sale than if you were to allow the bank to foreclose on your home.
In fact, we have recently heard experts say that for the AVERAGE individual the hit to your credit is approximately 80 points less by completing a short sale vs foreclosure! Why the difference? Lenders view a “short sale” as the “responsible” way of fulfilling your debt obligation. You are “settling” your debt with them and not “walking away”. Banks lose considerably more money when homes are foreclosed on, explaining why there is a larger credit “hit” to the borrower. *We do recommend that all our clients consult various experts regarding credit, tax and legal consequences, as this is out of our area of expertise
expenses, reduction of income, relocation, or other hardship, there is often a great deal of additional stress involved in a short sale transaction when compared to that of a typical transaction. Now it becomes even more important than ever to have Realtors working on your behalf who are specifically educated, skilled and experienced in all aspects of Short Sales from start to finish. We understand the specifics and dynamics of marketing your home in this declined housing market, are well versed in negotiating with lien holders, and we do this while staying committed to one of our core values - a pro-active commitment to communicating, educating, and advising our clients during the transaction.
