The Benefits Of A Short Sale -vs- Foreclosure

Real Estate Agent with Cartier Properties, Inc. 01458057

Who would have thought that we as a Nation would be going through such financial turmoil just a few short years ago…

We were at a family BBQ yesterday, and as we followed our GPS to our destination we were saddened but not surprised of all the homes that were boarded up with “No Trespassing” Signs.  Not to mention all of the commercial buildings along the freeway with huge banners “For Lease” in what seemed to be every shopping center we passed.

It’s painfully obvious that our economy has a way to go on the long road to recovery, and I think it’s going to get worse before it gets better.

Now, let me get to the subject of Short Sales and Foreclosures.

Many homeowners are still confused about the difference, and one crucial element that is missed by not understanding a foreclosure is that if you have a second on your home mortgage like a Home Equity Line of Credit or an 80 20 loan/meaning that you have a first lien holder and a second lien holder if you foreclose you still owe the money to those “second” lien holders.

I’m not an attorney and do suggest you speak to a knowledgeable attorney on this subject before making these types of decisions.  In most cases, your going to want to do a Short Sale.  A Short Sale will allow you to have minimal long term negative ramifications to your credit, in fact, we are seeing “new consumer debt” being accrued within months of a completed short sale.  What this means is that creditors view a short sale as a responsible way to deal with an unfortunate situation.

I’ll share a call with you that I took last week from a very wealthy elderly man that had called looking for direction…

Mr. “Smith” called and explained that he had moved out of state and owned many homes throughout the United States and all of these homes were upside down in equity.  His main concern was a home that was here in California, he was over a $100,000 upside down and was not planning on moving back to California.  The home was a true showplace and up until recently had been “rented” by a family member.  Now the home was sitting vacant, the mortgage payment was very high in comparison to the rent the market would bring.

After a very lengthy conversation with Mr. “Smith” he had shared that his wealth, his life long saving had dwindled to nearly nothing…during the past two years he had used over ONE Million Dollars to continue making payments on his homes, although they were all grossly underwater.  Mr “Smith” shared that he was proud that he had done his best to be moral and do the “right” thing by “spending” his life long savings.

I felt such sorrow for Mr. “Smith”, no one at the mortgage companies cares that he has nothing left.  Mr. “Smith” is in his 70′s and will not be able to financially regain what he  has spent from his life savings trying to “Do the right thing”.  What will happen to him I wondered as I took the listing for his home here in California?

I’m not advocating being irresponsible, I’m telling you to be responsible and think about your future.  Who will take care of you and your family once you’ve gone through your savings and find that you are out of options and must move from your house.  Now you have no resources to move on…

No one could have predicted that the housing market would crash and burn the way it did, unemployment hitting record highs.  But you can do something for yourself and your future now…

Choosing to do a Short Sale does not mean you are destitute.

“Hardships” come in many scenarios,  Here are a few examples of immanent foreclosure ( Banks use this term when approving Short Sales)

  • Change in income
  • Relocation for Employment
  • Change in family size…you’ve had a baby
  • Child Care Expenses
  • Taking Care of an Elderly Parent
  • Taking Care of an Adult Child due to a hardship they have suffered
  • Death
  • Divorce
  • Medical Bills
  • Increased living expenses no increase in income, example…higher utility bills, gas prices, food prices, school, insurance, mortgage payments
If your struggling with any of these things please call us.  We are here to help you find the best options for you and your family.


Posted by



Bookmark and Share

Follow KandKDarney on Twitter


This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
ActiveRain Community
California Los Angeles County Glendora
The Lounge at Active Rain
Short Sales in So Cal
short sales affect credit
short sale assistance
bank of america short sales

Spam prevention
Show All Comments
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Kris & Kim, I see this often. Home owners go through their savings trying to save their home. It always comes to the point of foreclosure, or short sale. Short sale can be a better option for many.

Jul 15, 2011 06:36 PM #1
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Kris & Kim Darney

Your REALTORS® For Life
Ask me a question
Spam prevention

Additional Information