We know that purchasing foreclosures and short sales have their risks. However, Coldwell Banker Olympic can help you manage your options well to make a sound and educated decision in maximizing the value of the real property that you plan to purchase.
What’s the difference between a Foreclosure and a Short Sale?
On Fannie Mae Backed Loans
FORECLOSURE – Ineligible to Get Fannie Mae Backed Loans for 5 Years
SHORT SALE – Get Fannie Mae Backed Loan after only 2 Years
On Your Credit Score
Credit Score may be lowered from 250-300 points on a FORECLOSURE and may affect ytour score for over 3 years. On a Short Sale, your Credit Score may be lowered as little as 50 points but it only affects your score for as brief as 12 to 18 months.
On Credit History
Foreclosure will remain as public record on credit history for 10+ years while a Short Sale is not reported on a credit history.
On Applying for Jobs / Employment
Employers have right to check credit and foreclosure may affect current or future employment. This is a very normal process in today’s hiring procedures since the economic downturn. Short Sale is not reported on your credit history and will not affect employment opportunities.
On What the Neighbors Might Say
If property is foreclosed or sold at a trustee sale (Pre-foreclosure Auction before Bank repossession), the bank will most likely post a public eviction notice to vacate owners and a Foreclosure Sign may be posted on the property after the sale is Finalized. However, with a Short Sale, there will be no “Foreclosure” sign on the property, so neighbors will see it as a regular sale. Short Sale is a dignified and confidential means of mortgage debt relief.
On Liabilities after the Sale
There is Homeowner liability after foreclosure. If you have two loans on your property, you may not be protected against personal liability by the second lender if the first lender forecloses on the property. On the other hand, a Short Sale can possibly protect you from personal liability from the second lender by successfully negotiating for the lender to accept a loan payroll for less than what’s owed and give you a written release from personal liability.
Talk to one of our realtors or send us an online message so we can arrange for a meeting and discuss your property acquisition options.
Get expert advice from California’s real estate expert: Coldwell Banker Olympic!