SSE Section 3

The benefit of a Short Sale over a Foreclosure

If you participate in a short sale, and the company you hire is successful in getting the bank to accept short of what is owed to them on your mortgage, your credit will only show 30-60-90 day late payments, contrary to an actual foreclosure on your record. If you foreclose on your home, you will not be able to get another mortgage for as long as seven years. If you manage to do a short sale, you may be able to get another home mortgage within a couple years or less.

This requires your lender to take a discount on what is owed them. Sometimes your lender will take as much as 20% or more less than what is owed. If you have a FHA mortgage, your lender will send out an appraiser and can accept approximately 82% less than the appraised value.

Why would a lender take less than what is owed to them? Because a short sale will save your lender the costly process of getting the home back in Foreclosure. The foreclosure process for a bank is a very long process and usually a very expensive project for a bank. They will have to incur the costs of an attorney, maintenance of the property, sometimes mold issues, securing the property, real estate fees along with many other fees.