Posted about 14 years ago

Should I short sale?

Should I short sale? This is a question on top of the minds of many homeowners that are in over their heads in debt and their properties are no longer worth what they owe on their home.

Here are some questions I ask sellers when they ask me: Should I short sale?

Do you want to avoid foreclosure?
Have you lost your job or seen a significant reduction in your pay?
Do you have any medical conditions that are preventing you from working or creating a financial burden?
Is the interest rate on your loan ballooning and making your payments out of reach?
Have you exhausted all efforts to modify your loan?
Has your partner or spouse passed away?
Has your job or other circumstanced required you to relocate to another city or state?
Are you concerned with your credit score?

Avoiding foreclosure is usually the motivating factor for homeowners who are upside down on their loans. Their main concern (and rightly so) is avoiding the huge hit to their credit score that a foreclosure vs. short sale would entail. Short sales typically take a smaller “hit” to the FICO score verses foreclosure.

Make sure though before you consider the short sale process that you can provide to your lender a genuine “hardship”. If you answered yes to any of the questions 2-7 then there’s a good chance you qualify for a short sale.

Are there short sale benefits? Sure there are, here are a few:

Less of a hit on the credit score.
HAFA offers $3k in relocation expenses.
Avoid foreclosure.
Peace of mind.
A fresh start.
Faster credit recovery means you can buy again sooner.

Should I short sale? It’s a tough question to ask oneself. But having clarity of where you stand and then taking action to put you and your credit score back on the right track will give you peace of mind.

Should I short sale?

Should I short sale?

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