Foreclosures vs. Short Sales, They are not the same!

I would say that now a days 90% of the calls I get are on people wanting to buy a foreclosure or a short sale. They are out there and, for the right buyer, they might be a good deal. But, what if you are a seller facing a possible foreclosure? Do you know where to turn and what to do? Have you considered a short sale? Recently, I received a designation as a Certified Distressed Property Expert (CDPE). I have seen first hand the stress and devastation families are going through when facing a foreclosure. I've also seen what a nightmare they can be if the real estateagents representing those sellers don't know what to do and how the process works. I am saddened by what I am seeing all around me and the distress that people are in when they can't make their payments. I am going to be blogging more about what to do if you are facing a foreclosure over the coming weeks. To start, I thought I would include some information on short sales vs. foreclosures. I think that there are a lot of misconceptions out there about what a short sale is, if a short sale is successful there are a lot of benefits. In a foreclosure, you won't be able to buy another home for 5 to 7 years, vs. a short sale where you can buy again in two years. Foreclosures can lower your score anywhere from 250 to 300 points and can affect you for three years. You can do a short sale with as little as a 50 points off your current credit score and the affect on your credit can be as little as 12-18 months. Foreclosures stay on your credit history for 10 years, short sales are not reported. If you ever fill out a 1003 (the application to get a new loan for a home) you must disclose if you EVER had a foreclosure, there are currently no questions regarding a short sale. This is one that I never even thought of until recently, but foreclosures can affect your employment both currently and in the future. Military personnel, police officers, CIA, bank positions or anything that requires a security clearance, security clearance can be revoked and the person can be terminated from their position!! Short sales typically do not challenge most security clearances. If a person has or is applying for a position where credit can be checked, foreclosures will come up and could affect a person's current job or a job they are applying for in the future. Lastly, in 100% of all foreclosure cases, the bank had a right to pursue a deficiency judgement, meaning that the difference that the bank made on the sale of the house vs. what the person who owned the house owed, can be attached to the person as a deficiency judgment, making them responsible for the amount the bank lost. In a properly negotiated short sale, the seller, with their agent, can negotiate with the bank so that home owner is not responsible for the deficient amount. There is a lot to consider and if you are thinking you may be facing a foreclosure, you have to have a hardship and build a case to the bank, its work but absolutely worth what you are saving yourself in the future, your credit your job security and future judgments against you. Consider a short sale and talk to a qualified professional.