There are pros and cons to a short sale...

Seller - PRO: Lose the House, but Not Your Credit According to sources in the mortgage industry, people who agree to a short sale with the lender do far less damage to their credit rating than those who go through foreclosure.

Short sales show up on a credit report as a "pre-foreclosure in redemption" status and can result in a credit score reduction of 100 points or less. After the sale, the mortgage may show up as "discharged." People who successfully complete a short sale may also qualify for a mortgage at a reasonable interest rate in as little as 18 months. So, if buying a home is a future goal, then a short sale is the better option for many.

While in both cases, short sale and foreclosure, the delinquent mortgage will negatively affect their credit rating, at least short sellers avoid having a "debt discharged due to foreclosure" on their credit reports. Mortgage and credit experts say that, after bankruptcy, having a foreclosure on your credit report is the worst result and will reduce your credit score by over 250 points. You could also have to wait up to five years to qualify for a mortgage at a reasonable rate.

Seller - PRO: We can assist you in negotiating other liens against your property as well, including tax, homeowners dues, and others.

Seller - PRO: If your lender is aware that we are working with you, they will typically allow you to stay in your home until that time that we are able to close successfully on a sale to a new buyer. 

Seller - PRO: At least throughout 2010, the IRS will not be taxing any mortgage deficiency as 'phantom income' to you, the homeowner seller. 

Seller - PRO: There is no cost to you for us to complete a short sale on your behalf, our fee is negotiated directly with the lender and is also based upon the total we are able to obtain for your property.

Seller - CONS: This is where we come to the biggest drawback for the seller. The seller will have to give up their home that they have worked so hard to buy and maintain. It can be a negative emotional experience. It can also be a very positive time and the seller may find comfort in the fresh start they are being given. The negatives to a seller's credit can vary which is why it's important to have a team of professionals working for you so that you understand the credit hit as it pertains to you and your individual case.**

*Before deciding on a short sale, we ask that you speak directly with a representative from our office, your accountant and your legal advisor to most accurately determine how a short sale will personally affect you.