The depressed economy has had an adverse effect on many families and industries, but perhaps one of the hardest hit sectors of the country has been the real estate market. House values have dropped dramatically, and the numbers of bank owned properties have climbed to record heights as people struggle to keep up with their house mortgage payments. This has created a scenario where homeowners believe it's better to just give up and walk away from their home, instead of find ways round the problem. One of those options is to go with a short sale, yet many of us don't know how that works.
There are several things to look when measuring a foreclosure vs. Short sale , not the least of which is the effect that either will have on your credit report. Foreclosure means that you will lack the capability to buy another home for a period of 7 to 10 years, whereas with a short sale, your credit score will drop, but you will still be able to buy once your rating hits a level that is satisfactory to financial institutes . That may well be the most important factor in the foreclosure versus. Short sale debate, but to choose which is better for you, it is crucial to know how both work.
With a foreclosure, you are basically giving up the rights to your home and letting the bank to take it and sell it. When the house is sold by the back at a price that is lower than the loan you owed, you'll still be on the hook for the difference if the bank decides to pursue a deficiency judgment. This could lead to garnished salary and some real difficulties should you ever attempt to buy another home in the future. You have much more control when you opt to go the short sale route, as you can set the price that you take to the bank. The best time to go into short sale mode is before your financial affairs start to spin out of control. The general feeling is that the lender would prefer to agree on an amount that might be close to valuation, instead of run the risk of going to auction and losing a large chunk of money.
Getting your lender to agree on a short sale is not always an easy task, but trying is much better than just waiting for foreclose and then having to live with the side effects for several years to come. You'll hear arguments on both sides of the foreclosure vs. Short sale debate, but the only real way to truly decide is to assemble as much info on both as possible. One excellent way to do that's to take a look at the great info provided at www.houseforshortsale.com . There you'll find all you need to understand about both, and I highly recommend taking a thorough look before arriving at a decision.
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There are several things to look when measuring a foreclosure vs. Short sale , not the least of which is the effect that either will have on your credit report. Foreclosure means that you will lack the capability to buy another home for a period of 7 to 10 years, whereas with a short sale, your credit score will drop, but you will still be able to buy once your rating hits a level that is satisfactory to financial institutes . That may well be the most important factor in the foreclosure versus. Short sale debate, but to choose which is better for you, it is crucial to know how both work.
With a foreclosure, you are basically giving up the rights to your home and letting the bank to take it and sell it. When the house is sold by the back at a price that is lower than the loan you owed, you'll still be on the hook for the difference if the bank decides to pursue a deficiency judgment. This could lead to garnished salary and some real difficulties should you ever attempt to buy another home in the future. You have much more control when you opt to go the short sale route, as you can set the price that you take to the bank. The best time to go into short sale mode is before your financial affairs start to spin out of control. The general feeling is that the lender would prefer to agree on an amount that might be close to valuation, instead of run the risk of going to auction and losing a large chunk of money.
Getting your lender to agree on a short sale is not always an easy task, but trying is much better than just waiting for foreclose and then having to live with the side effects for several years to come. You'll hear arguments on both sides of the foreclosure vs. Short sale debate, but the only real way to truly decide is to assemble as much info on both as possible. One excellent way to do that's to take a look at the great info provided at www.houseforshortsale.com . There you'll find all you need to understand about both, and I highly recommend taking a thorough look before arriving at a decision.
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About the Author:
Kendra Chui is a short sale expert in California helps homeowners get short sale approved with cash back.
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