If I Sell My Home as a Short Sale, Will I Ever be Able to Buy a Home Again?

By
Real Estate Agent with Donovan Blatt Realty 01267479

Short Sale is a word that has become very common in real estate in the last year or two.  For more information on short sales in general see Do You Need a Short Sale  or What is a Short Sale.  

One of the questions I have been asked by my sellers is we really need to sell our home, but it's going to be a short sale, and we're concerned that we won't be able to buy another home later?  What can you tell us about buying later?

Worried Orange County Homeowner

How long it takes to buy another home will depend upon several factors.  Will the bank report the short sale to your credit?  If it doesn't, it will likely be easier for you to buy a home quite soon, depending upon your general credit profile and any late payments, as well as the other usual factors for getting a mortgage. 

But, if it is reported on your credit, then according to Lynn Nelson of MetLife Home Loans, a seller should be able to qualify for an FHA loan between 2 and 3 years after a short sale if they establish new credit and keep their old credit in good standing. 

 Currently FHA requires 3.5% down payment and has a loan limit of $625,500.

So, under current FHA guidelines, in Orange County, a person with a short sale in their history should be able to obtain an FHA loan about 2 to 3 years after the completion of the short sale if they maintain good credit.

Under Fannie Mae guidelines - a person who sells a home as a short sale, may qualify for a new loan in 2 years, while it is 5 years with a foreclosure.

 

Click for a free list of Orange County foreclosures or a free list of Orange County short sales or e-mail Me!


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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? Contact me at christine@donovanblatt.com or 714-319-9751 to discuss your options.

Want to buy a home or to list your property for sale in Newport Beach, Costa Mesa, Huntington Beach or Orange County? Contact me at christine@donovanblatt.com or 714-319-9751 to learn about my system which will make your buying and selling experience easier.

Click Orange County homes for sale to view all OC homes for sale.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied.

Copyright © 2009 by Christine Donovan, All Rights Reserved. If I Sell My Home as a Short Sale, Will I Ever be Able to Buy a Home Again?

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About the author: Christine Donovan is a California Residential Real Estate Broker with experience in assisting clients buy and sell residential real estate.

Are you upside down in your home? Is it worth less than you owe? Are you concerned about making your mortgage payment? For more information see Options to Foreclosures, understanding short sales or contact me at christine@donovanblatt.com to discuss your options.

If you want to buy a home or to list your property for sale, please click Newport Beach homes, Costa Mesa homes, Huntington Beach homes or Orange County homes.  Click the link if you are interested in buying a home at a courthouse auction sale.

Contact me at christine@donovanblatt.com or 714-319-9751 to learn about her system which will make your buying and selling experience easier.

Disclaimer: All information in this blog is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. This blog is not intended to offer any legal, tax or other advice.

Click Orange County homes for sale to view all OC homes for sale.

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Yvette Gardner 03/18/2009 03:10 PM
  2. Christine Farkas 04/21/2010 06:06 PM
Topic:
Home Selling
Location:
California Orange County
Groups:
Posts to Localism
Orange County Real Estate
Short Sales Specialists
The Ninety-ninth Percentile
Addicted to Active Rain
Tags:
credit problems
short sale
buying a new home
orange county short sale
effects of a short sale
selling your orange county home

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Rainmaker
84,778
Simon Mills
Mills Realty - Toluca Lake, CA

Great info.  Thanks for posting.

Jan 31, 2009 03:58 PM #1
Ambassador
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Simon - You're welcome.  I think this is important information in today's real estate market.

Feb 01, 2009 12:20 PM #2
Anonymous
Minna

I agree. I think there's a lot of mystery out there around the ramifications of a short sale. The fact is a foreclosure is the worst thing you can out on your credit, and a short is always a better option, assuming the client qualifies.  I think too many people just let the foreclosure happen not knowing how much better off they would be doing the short.

Feb 03, 2009 12:28 AM #3
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Minna  - I think a lot of people just don't know what to expect, and with so many short sales happening, it's important to provide as much information as we can.

It's unfortunate that people sometimes just let the foreclosure happen.

Feb 03, 2009 02:53 PM #4
Rainmaker
4,797,927
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Thanks for the post Christine, great information.  And it may change again soon in this climate.

Feb 08, 2009 10:34 PM #5
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Gabe  - You're welcome, and it just might change.  We'll see what happens.

Feb 09, 2009 01:08 AM #6
Rainer
1,943
Eric Yerke
Coldwell Banker Hedges - Cedar Rapids, IA

All I have to say to people in these situations is that it is a million times better than getting forclosed on.  Either way they are in a bad situation

Feb 11, 2009 09:01 AM #7
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Eric - I agree.  It's a bad situation either way, but a foreclosure just makes it worse.

Feb 11, 2009 02:32 PM #8
Rainer
2,640
Cindy Spoo
Charles Rutenberg Realty - New Port Richey, FL

I wanted you to know that after a short sale the seller can buy a home after  2 years. If they had a foreclosure on their record, I believ it is 4-5 years FNMA and 3 years FHA.

Of course, all this is assuming that their consumer credit is in good standing.

Feb 22, 2009 12:34 PM #9
Rainmaker
527,617
Wendy Rulnick
Rulnick Realty, Inc. - Destin, FL
"It's Wendy... It's Sold!"

Christine - And... Fannie Mae guidelines suggest only a two-year waiting period prior to obtaining a new mortgage.  Obviously, other credit factors might be considered.

May 16, 2009 11:38 AM #10
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Wendy - That's a nice point about Fannie Mae guidelines, and I've added it above.

May 16, 2009 01:17 PM #11
Anonymous
Ron

A good question and I would say there are different answers for that.

www.ForeclosureNightmare.com

Jun 16, 2009 02:03 PM #12
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Ron - It can depend upon the situation.

Jun 16, 2009 05:36 PM #13
Rainer
3,456
Christopher DiNapoli, Realtor, CDPE.CRPS
Samson Properties - Woodbridge, VA
Buyer,Seller and Distressed Properties.

One of the questions I have been asked by my sellers is we really need to sell our home, but it's going to be a short sale, and we're concerned that we won't be able to buy another home later?  What can you tell us about buying later?

 

If its a Government Backed loan. It takes two years. I know. I have done several already.

Jul 06, 2009 01:55 AM #14
Rainer
1,078
Michel John
We Buy Houses Cash - Leupp, AZ

Your point is very correct

Oct 27, 2009 02:21 AM #15
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Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Christopher - It's good to hear you were able to help these people.

 

Michael - Thank you.

Oct 28, 2009 04:06 PM #16
Rainmaker
525,764
Dave Halpern
Keller Williams Realty Louisville East (502) 664-7827 - Louisville, KY
Louisville Short Sale Expert

Christine, thanks for bringing up a commonly asked question.

There is life after foreclosure and there is life after a short sale. Life gets back on track faster after a short sale.

Apr 07, 2011 08:08 AM #17
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