Q: Why should I “bother” with doing a Short Sale rather than letting the property go to foreclosure, especially since I make "too much money"?
Great question!
Generally speaking there are at least three reasons to consider a Short Sale versus letting the property go to foreclosure:
1. The amount resulting from a Trustees Sale (Foreclosure) will be less than the amount the Lender(s) receive from a Short Sale, meaning that the amount of “debt forgiven” by the lender is less with a Short Sale, and therefore tax liability (if there is one) is less by completing a Short Sale.
2. A Short Sale has less of an impact on an individual’s credit score than a 
Foreclosure if it's reported correctly. If you complete a Short Sale and subsequently find it has been reported as a foreclosure you are entitled to challenge that entry on your credit report.
3. Someone who has completed a Short Sale should be able to purchase again sooner than if they allowed a property to go to foreclosure. *** Consult with your Lender ***
" I make too much money / have too much money and have heard that Lenders won’t approve a Short Sale because I can afford to pay the difference at closing."
Lenders evaluate Short Sale approvals based on the merits of the specific situation. If it makes more sense to approve a Short Sale rather than taking the property to foreclosure, they will likely approve it. Our past Short Sale clients include individuals making 6 figure incomes and/or having more than 6 figure amounts in savings. Very rarely (less than 2% of the time in our experience), Lenders may stipulate a contribution from the Seller as a condition of approval. The Seller does not have to agree to make any contribution to close the transaction.
If you have additional questions regarding Short Sales we're happy to discuss them with you - no charge, no obligation. Contact us today!
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