What is a Short Sale and why do people do it?
Here’s a brief information (reader's digest version) on Short Sale.
A Short Sale is nothing new. Short sales have been around probably almost as long as real estate mortgages. Short sale is a way for you to avoid foreclosure and your lender to lose the last money, when you’re in a situation where you’ll no longer be able to keep that home. 
There could be a variety of reasons behind that. It could be a job loss, death of an income earner, job relocation, medical problems, increased other expenses and quite frankly, sometimes it’s just that we run into people who just made a financial decision or a business decision wherein they owe a $320,000 loan on a house that’s only worth $200,000 and they're planning their financial future, and this house and the mortgage are no longer in that picture.. and they're making a business decision to get moved away from this. In all of these situations we've helped people, a lot of people - about 400 of them in the last few years.
Why do you do it? Especially If you've just figured out, whatever stage of life that happened or you're making this business decision that you need to get away from this mortgage, and you have not stopped making payments yet, there are all kinds of upside to doing a short sale, versus walking away from the home. There is far less impact on your credit in most cases; there is no "reporting" - your credit report doesn't show a short sale when you do a short sale; it shows a settlement, i. e. paid as agreed for less than amount owed, settled for less than full balance - something to that effect report to the credit report. 
Foreclosures report to the credit report as a foreclosure, in which there are all kinds of various waiting periods with the foreclosure versus the short sale. From that perspective, there are all kinds of upside to do a short sale, not to mention, one of the things is the neighbors. If you've been in this neighborhood a good while and you know the neighbors and you just vanish one day, and then the next thing the neighbors know is there's a sign in your yard, “for sale” sign - a foreclosure.. and that's what the neighbors think happened.
While when you do a short sale, you're really selling the house on your terms, you'll be needing to sell the house at market value or around there, to entice a buyer who comes along, and your bank understands that - that the house is only worth what it's worth. But if you're able to do that, you're able to sell, move out of the neighborhood on your terms - kinda help the neighborhood on the way out, preserve values that may be a big deal to you or it may not.
There are enough other reasons, enough selfish reasons to do it beyond the reasons for the neighborhood. And that really is just a tip of the ice berg - if you're considering a short sale, or thinking about it, or heard about it or don't know if it's for you or not, I'd like to invite you to give us a call at Polston Results Team so we can go into more detail and find out if it will work for you.
- Shawn Polston, Tucson and Sierra Vista Short Sales Specialist
Polston Results Team - Keller Williams Southern Arizona
"Where Buying and Selling Really Matter!"
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