Short Sale vs Foreclosure
| Short Sale | Foreclosure | |
|---|---|---|
| Who controls the sale? | You control the sale, not the bank. | Bank controls the sale. |
| Buying again after Short Sale or Foreclosure |
Can purchase another home immediately if your payments have never fallen behind 30 days late and if the lender doesn’t require you to pay back the loan. | May be eligible to buy another home in 5 years if the home was your primary residence. Without restrictions, the wait is 7 years. |
| Effect on Credit | The word “short sale” will not appear on your credit report. Some homeowners have reported negative FICO score drops from 50 points to 130 points. Major point drops are due to being in default, meaning you have fallen behind on your payments. | Depending on your credit history, your credit score could fall between 105 and 160 points after a foreclosure. Most of the time, a foreclosure will remain on your credit report in the tradelines section for 7 years. |
| Length of Process | The wait for a short sale approval can be from 2 to 3 months or longer. | Banks may want you to immediately vacate the property and can commence eviction proceedings. |
| Taxation after | Mortgage Relief Act can protect a homeowner from being taxed under certain conditions. IRS won’t treat the debt forgiven by the bank as income, which means they may not have to owe taxes on that amount. | Whether or not you have sold your home voluntarily or involuntarily, you have sold your home and could be subjected to taxes. |
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At this point you know that you are most likely going to have to say goodbye to your home whether it be voluntarily or involuntarily. Either way, the decision you are making is going to be difficult, but before you get in over your head let’s discuss the difference between short sales and foreclosures. This way you can make the right decision and most importantly feel good knowing you made the best decision.
Losing your home involuntarily can be prevented. Don’t let the bank take away your beloved home before you even get the chance to get help! Relieve the stress and anxiety by speaking with a ShortSaleAgentFinder representative who can assess your situation and lead you on the right path.
First, avoid the social stigma of the ‘F’ word, that is Foreclosure. If you take the appropriate steps prior to losing your home to the bank, you will really benefit from the situation. At this point in time you're thinking, what else can they take from me if they are taking my house? Well the truth is, they can take a lot. Foreclosures can cause problems in your future and right now that is the last thing you need.
The thought of your home being sold through a foreclosure auction can be scary and unsettling. When your home is sold through a short sale, the listing will look essentially like any other listing. Also, after a foreclosure you will be unable to finance a new home for about 5-7 years. When your home is sold through a short sale you will be able to purchase a new home within 2 years.
Also, short sales do offer cash back incentives. Although this isn’t the biggest benefit from a short sale, it is definitely better then not receiving any money back, as you would in a foreclosure. The Home Affordable Foreclosure Alternatives program can get the homeowner cash back toward relocation expenses. This is the government’s way of attempting to promote short sales as an alternative to foreclosure!
Lastly, why wait around for the bank to step in and evict you. With a short sale, you can take your time to find a new place and get settled within 2-6 months, depending on your lender. Short sales on average take as little as 2-6 months, whereas the foreclosure process averages 15 months. Life is too short to carry the weight and anxiety of your home. Get rid of the burden and move forward with a short sale so you can get on with your life!
Our agents are qualified and ready to work with you in whatever situation you might be. Our agents are personable, experienced and understanding.
Enter your information in the form above. You will be connected with an agent right away. Imagine, in 3 months from now you can be in a new place with the weight of the financial and emotional burden off your shoulders!