A short sale is usually the last step before losing your home to foreclosure. It is important to note that, yes, you are losing your home in a short sale but their are two major differences. In a short sale:
- Terms of the short sale are negotiated with the lender. In a short sale you have some control on whether the lien holder(s) with file for a deficiency judgment or not. In a foreclosure you have no control, the bank retains the right to file for a deficiency judgment. In Massachusetts a mortgage company has 2 years to file and 20 years to collect on a deficiency judgment.
- Your credit score is far less impacted by a short sale than a foreclosure. With a short sale you can go on to buy a house in just a few short years. In a foreclosure you are probably looking at 7 years.
It may seem hopeless now, but things do change. It is definitely in your best interest to try and do a short sell and do not allow the bank to take your home in a foreclosure. Most times the first lien holder is allowing homeowners to walk with no deficiency judgment. With second lien holders you do a have a 50/50 shot of walking with no judgment against you.
Believe it or not most lenders would rather you try and short sale your home, then own your home through the foreclosure process. It is usually far less expensive for the bank to allow you to do a short sale than to foreclose. Do yourself a favor and consider a short sale.
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This post was provided by Kevin Vitali of EXIT Group One Real Estate In Tewksbury MA. If you live in Massachusetts and are considering a short sale contact Kevin by email at kevin@kevinvitali.com or call 978-360-0422.
Real Estate Services in the northeast Massachusetts, around the Merrimack Valley, Southern New Hampshire including the towns of Andover, Billerica, Boxford, Chelmsford, Dracut, Georgetown, Groveland, Haverhill, Lawrence, Lowell, Merrimac, North Andover, Newbury, Newburyport, North Reading, Rowley, Tewksbury, Tyngsboro, Westford, Wilmington, West Newbury
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