Short Sale Risks

You may have heard of short sales, they've become increasingly common in today's market and they have even affected Coral Gables homes in some cases.  A short sale is when a property is sold and the lender agrees to accept a discounted payoff.  It's considered a reasonable alternative to foreclosure but contrary to what homeowners might think, it also has its risks which should be taken into serious consideration.

Your credit will still be affected.   A short sale is still looked upon as a delinquency since you were essentially unable to pay back a loan and are therefore a financial liability.  On the plus side, if you maintained good credit before the short sale occurred then your credit score won't be affected as much.

You may still have to pay back the balance.  Banks in many cases will usually try and get the borrower to sign an agreement stating that they will pay back whatever the difference is between the amount left on the loan and the price it sold for.  Hiring an attorney or talking with the bank can help in possibly having this agreement removed.

You'll have little time to get back on your feet.  Generally foreclosures are a drawn out process that can take several weeks, thus allowing you time to recover.  A short sale on the other hand will force you out in a much quicker amount of time.