A short sale is a transaction where the lender allows you to sell your house for less than you owe. Lenders prefer it to a foreclosure, which is a legal process that can take up to a year after you stop making payments and will cost the lender more than if you participate in a short sale.

As soon as you are 30 days late, your lender(s) will call and send collection letters. At 90 days late most lenders will file a lis pendens which is the beginning of a foreclosure law suit. This is recorded in the public records, so you will get calls, letters and people at your door. Don’t ignore the problem! If you do nothing, the foreclosure process will continue without you. Call a Realtor who is a CDPE, Certified Distressed Property Expert. We have 3 in our RE/MAX Experts office that are professionally trained and have successfully closed many “Short Sales”. It costs you NOTHING. A Realtor will negotiate with the bank for you and get paid by the bank when they sell your house to a new buyer. Never pay anyone upfront to help you!

There’s A HUGE difference! If you allow yourself to be foreclosed on you won’t be eligible for a new Fannie Mae or a government backed loan for 5 years. Your credit score will be lowered as much as 250 to 300 points. It will remain on your credit history for 10 years or more and the bank has the right to pursue a deficiency judgment, which means if your home is sold for less than what is owed on the mortgage, you may be liable for the balance due.

A foreclosure can also affect your current and future employment. If you are in a sensitive job like bank teller or cashier, the military, law enforcement or work for a government contractor that requires security clearance you could lose your job or be prevented from getting one due to a foreclosure. Like a felony it follows you for many years.

In a short sale a home owner who successfully completes a short sale transaction can get a new government backed mortgage in 2 years, not 5. The credit score can go down as little as 50 points not 300. A short sale is not reported in a credit history so it’s not a challenge to current or future employment. It’s possible the lender may not pursue a deficiency judgment. In a short sale the lender will net more than in a foreclosure.

For more details about the differences, see our Short Sales vs Foreclosures page.

Lenders will only accept a short sale contract from a professional realtor. Only time on the market can prove a highest and best price available. Realtors assume the burden of communicating with the lender. As CDPE negotiators we attract and package offers acceptable to lenders and present them on your behalf.

First don’t abandon your house and second, we Realtors say: “It’s a price war and a beauty contest!” We will price your home aggressively but as the owner you must make sure that the home looks and smells good.

They ask for money up front, they ask you to sign a deed or other paper that gives them title rights to your property, but does not remove you from the mortgage. What they promise sounds too good to be true.

Call a Certified Distressed Property Expert, CDPE as soon as you realize you have a problem and there is time to sell your home and save your credit and possibly your job and future job prospects.