As I sat here this week working with clients, friends and family members, I came to the realization that in most states, including Nevada, there is not much benefit for an individual to short sell their home. Now please let me qualify this, before you all send me hate mail.

1. Laws and Protections: In most states foreclosure gives the individual certain rights and protections that short sales do not. In Nevada, the banks do not typically request a judgment for the difference between foreclosure and sale price. Some states the judgment is automatic. In Short Sales, it is becoming a regular thing and the bank can take up to a year to attach. Some miss informed sellers try to file bankruptcy after foreclosure then 10 months later that judgment comes thru and now they are stuck.

2. Dollars:  In Nevada, the bank may or may not try to get the difference from the foreclosed amount and the sale of the home after foreclosure. Again, here in Nevada homes that are foreclosed on typically have $100K or more in negative equity. So if your seller lets the home go to foreclosure, the bank usually writes it off the difference. They also have time limits as to when they can do this and how it must be done. So, if you are the seller and 6 months goes by after you sell your home in a short sale and all of a sudden you get this nice little letter from the court saying that a Judgment has been placed against you and now your wages will be garnished. Would you like to be the agent on that one and you did not inform your seller of the risk.

3. Credit: Well, yes foreclosure is a little more severe then Voluntary Foreclosure or Short Sale, but they both stay on your credit report for 7 to 10 years and they both are negative. On Short sale if they go for attaching that judgment, now you have a two for one negative comment special. I think in most cases, the foreclosure will be over looked, but a voluntary foreclosure and a garnishment /judgment may not as now it shows 2 things against you.

4. Who really Benefits: WELLLLLL, I am a Realtor and my job is to help individuals sell or buy homes, but on a short sale the only people who truly benefit is the Realtors and the Mortgage Company of the new loan. Don't shoot the messenger. If the individual is living in the home, with foreclosure looming, they live there in relative peaceful existence and save the money they would be paying for rent or mortgage. They will need that money when they try to convince an owner or property manager to rent to them. However if they choose short sale, they now must have their home available for showings. People will be in and out of their home, are they going to live there during the short sale? What about up keep, if they choose to move are they going to leave the utilities on to help with the sale or are they going to let the home become a dump.  There is truly a large amount of info to be considered and I hope that all of these agents doing short sales will take this into consideration before they tell a potential seller this is the way to go. 

I personally turned down 2 short sales this week as I did not feel it was in the seller's best interest to do a short sale. Call crazy, but I would rather be known for my honest upfront personality than that crooked agent who collected a commission on my home while my family suffered. This is one of those things where you should choose your battle and make sure you inform the Seller completely before taking that Short Sale Listing.

I hope this helps someone.