Foreclosure or short sale? Pros and cons

If you are facing foreclosure, here are some reasons you might attempt a short sale instead of just walking away:

1. You will always have to disclose your foreclosure on any mortgage application and many job applications. This can have an adverse affect on your future mortgage rates.

2. Your credit scores will be lowered by at least 300 points (versus 100-250 points on a short sale). It will be more difficult for you to acquire new credit in the future.

3. A foreclosure is the one credit report item that is almost impossible to have ‘repaired.’

4. A foreclosure takes seven years to drop off a credit report. (Your score can be rebuilt after a short sale in about two years). You will be unable to obtain a reasonable mortgage rate in order to buy a new home during that time.

5. Your lender will hound you to the ends of the earth in an attempt to get you to pay up. A short sale keeps the lender at bay for up to six months while the short sale is negotiated.

The most important thing a short sale delivers is peace of mind. You have a far greater degree of control over how your home is marketed and sold in a short sale– in most respects the process is identical to a traditional sale. It becomes easier to plan for the future, as your move is handled in an orderly manner.

Facing foreclosure is usually the most painful financial situation anyone will face. During the process you can feel like the victim of a natural disaster– dazed, overwhelmed and unclear on where to turn for help. Enlisting in the help of a Short Sale Specialist can help you establish a strategy to minimize your stress and make a fresh start. Please call or email me if you would like more information.

Dreaming of San Francisco? Cece Blase offers local advice to San Francisco buyers, sellers and owners– and feeds the dreams of those who wish they could live in Tony Bennett’s ‘City by the Bay.’ Call 415-577-0809 or email cblase@paragon-re.com. www.ceceblase.com