How does a shortsale really affect me?
The biggest question we are getting from homeowners in Minnesota contemplating a short sale are: “I’m getting so much conflicting information who do I believe?” Its a valid question and a very important one to ask before deciding to do a short sale. The short sale is a relatively new concept to most homeowners therefore they rely on trusted professionals to give them the facts. The truth is many professionals don’t really understand the complexity and impact – good or bad- a short sale can have. The most frequent thing we here during consultations is “My attorney said there is no difference between a short sale and a foreclosure” Nothing could be further from the truth. There is significant research and case studies that prove this opinion false. Consider the following:
1. A short sale stays on your credit for 10 years as a public record – A short sale is not public record
2. Most employers now pull a credit check before they hire someone – A foreclosure shows up as a seperate line item and says to the employer: “This person didn’t try to do the right thing and sell them home for what they could get, they took advantage of the bank and lived rent free for 12 months”
3. A Foreclosure impacts credit scores 250-300 points, A short sale impacts on average 60-80 points
4. Applying for future credit can be very difficult with a foreclosure- Again this says to the bank, “this person took advantage of the bank, they just stayed in the home until the bank had to throw them out and incur more costs.
Deciding whether to do a short sale and determining eligibility can be complicated, contact an agent who has experience doing short sales and is a certified property distressed expert (CDPE designation).