Wendy Rulnick, a Broker in Destin, Florida has written an excellent post on her blog about Short Sales and their effect on credit scores (How Will A Short Sale Affect My Credit Score?).  What makes Wendy's post so great, in my opinion, is not that it offers the definitive answer to the question that its title asks, but rather that it doesn't.

I don't care what anyone says, there is no definitive answer to that question, yet it is one of the questions I am asked most frequently.  Each Short sale is different and each one has a different impact on the Short Seller's credit score.  What I have seen with my clients is very consistent with what Wendy writes.  The impact is tied to a number of variable factors, including the number of mortgage payments missed and whether there is one mortgage being shorted or two.

But even this is not what makes Wendy's post outstanding in my opinion.  My favorite part of Wendy's post is that she makes us look at what I think is the real advantage is to a Short Sale... preservation of the possibility of a bright future for Short Sellers.

Short Sales are not simply about the exit strategy for someone's existing home, but about the seller's ability to purchase in the future and the containment of financial hardship to preserve the possibility of future financial stability and prosperity.  I have seen Short Sale clients qualify to purchase a home again in as few as 18 months after their short sale (Note: 24 months is more common), and the containment of damage to their credit score makes rebuilding credit for Short Sellers somewhat more manageable for many people.

The bottom line here is that nobody has a crystal ball to predict what the specific impact to your credit score will be (at best, there are rough estimates).  Anyone who tells you that they can predict the impact precisely should be met with some degree of skepticism.  But if you look at Short Sales less from that perspective and more from the impact effect they can have on the Short Seller's future ability to purchase and finance a home, and once again participate in the American Dream of home ownership, it is easy to see why they are such an attractive option for many homeowners facing foreclosure!

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If you or someone you know in the Dallas area is facing foreclosure and is interested in exploring the possibility of a Short Sale, please visit my website at www.HomeSalesRemedy.com for additional information or call me at (469)449-9840 to request a personal consultation.