If you’ve read our previous posts, Short Sales Explained and Do You Qualify For A Short Sale, you now are more familiar with what a short sale is and whether you qualify. However you may also still be very overwhelmed by your situation and think, “What’s the use?” I’ll just let my home go into foreclosure and be done with this.
Before you go down that treacherous path, think about the consequences. Here are some reasons that you may want to consider a short sale instead:
- Your credit score may drop as much as 300+ points in a foreclosure, typically impacting your credit for around 3 years. In a short sale, your score may only drop around 50 points if you are making your other payments on time.
- Lower credit scores make it harder and/or more expensive to obtain other credit and can cause credit card companies to reduce your available balance.
- While other types of collections can sometimes be “repaired” on your credit report, a foreclosure can almost never be fixed.
- In a foreclosure, your mortgage holder/lender can seek a deficiency judgment against you and collect any shortfall that is not recovered in the re-sale of your home. In a short sale, the bank generally recovers more of their shortfall and generally will waive their right to a deficiency judgment against you in the future.
- Most future employers will run a credit check, and a foreclosure can be a red flag negatively impacting your chances to get a new job.
- Security clearances and government jobs, including but not limited to military and law enforcement jobs, can be put in peril by a foreclosure. Other employers can also run credit checks, jeopardizing your employment. Georgia is an “at will” state, meaning that you can be fired for any reason.
- And finally, all mortgage applications and many job applications ask specifically if you have ever had a foreclosure, even if it no longer shows up on your credit report. So for decades to come, you may be impacted by higher mortgage rates if you decide to buy another home, it may be harder to rent a home or apartment, and it could impact your employment prospects.
In all cases above, a short sale tends to lessen or eliminate the negative consequences to you down the road. As your trained Distressed Property agent, we will help you work thru these issues with you. While it may seem overwhelming now, there will come a time when these problems are put behind you. Meanwhile, you will feel better knowing that you have done everything possible to avoid the devastating consequences of a foreclosure. So call – 404-314-8129 – or email us now to set up a free, no hassle and no judgment consultation to discuss how to get you on the right path to a successful short sale.