Foreclosures vs Short Sales: Things to Consider

If you are behind on your mortgage and are debating about letting your home go to foreclosure or do a short sale there are some facts you should be aware of before making a decision.

Some homeowners feel they can stay in their home longer if they let their home go to foreclosure, but the realty is that a good real estate agent can get the auction date extended several months more with an offer on a short sale.

A foreclosure will stay on your credit for 10 years and most people don’t like to have to revisit an explanation each time they are purchasing something with credit.  However, the rules are better now regarding purchasing another home.

If you proceed with the foreclosure, banks will require you to wait 7 years unless there were extenuating circumstances. For many short sales and foreclosures, you can buy sooner and a good lender can help with the current information.

For the higher end properties that will need a jumbo conventional mortgage loan, that is where the foreclosure hurts the most since the waiting period to buy is much longer than on a short sale.

There are also great programs to repurchase right away if you do a short sale staying current on your mortgage.  A good real estate agent can help direct you to the right decision. They will also always defer to your accountant, who knows your personal situation with regard to taxes and other accounting issues.

**This is not meant to address every aspect of the consequences of either a foreclosure or short sale, but is meant to be used as a guide to part of your decision making process. I am happy to go over your personal real estate situation with you on the phone or in my office. I am familiar with most banks in the area and how they operate. Call me at 760 519 8723 or email me at sellinghomes (at) if you need help figuring it out.

Cristine Clark, REALTOR

The Cristine Clark Team, Realty Executives

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