Education

What is a short sale?

A short sale is an agreement on real estate property between homeowner and the lender to sale out home at a low price than its total amount just to coup with foreclosure risk. For example, the purchase price of your home is $300,000 but is reduced to $250,000 and you must move, you can negotiate with your bank to make a deal according to current market value of the property. Sometimes, the short sale process might be lengthy and complicated, but with MaxReturnsREI you can get a bank approval within…… days.

Why Short Sell?

This is a crystal clear fact that foreclosure and short sale affect your credit score. There is no second opinion in this regard. However, the severity of the loss is worth-mentioning. As a result of foreclosure, the credit gives you no room and In case of short sale, the redemption status will show the credit as pre-foreclosure. A foreclosure might stop a homeowner purchasing a home for longer period of time as compared to the short sale process. Further, a foreclosure has severe impact on individual’s FICO score which results in drop in score. In most of the foreclosure cases, people report a drop of 200-300 points in their credit score. However, if a homeowner goes for short sale, he will suffer from a relatively less drop points in his credit score. Another very important point in favor of short sale is that property sells out like all other real estate properties and family, friends and neighbors do not know that the homeowner is selling out his home through short sale. Having signed the escrow for short sale, the homeowner may move freely in his home. A foreclosure badly affects the credit history of the homeowner and resultantly plunges him into a series of complex problems. So, if you are near to foreclose your home, we highly recommend you to negotiate with a professional real estate lender just to avoid the severe impact on your credit score.