Real Estate News

When you try to talk to a homeowner about doing a Short Sale remember that one thing on their mind is how a Short Sale will affect them. You must answer answer this question quickly or or this discussion will end pretty soon . Primarily two areas need to be addressed: Credit History and Future Home purchasing.  

How does a Short Sale Affect Credit Score
Some homeowners mistakenly think they will prevent damage to their credit if they agree to a short sale as an alternative to a foreclosure but that just isn’t the final outcome . Sometimes their credit is already damaged if they haven’t been paying their mortgage . The sad truth is their credit score WILL be affected and could drop two or three hundred points. The FICO score drops the same for a foreclosure as it would a short sale. The best thing you can try as a Short Sale representative is to request that the lender not send a negative account to credit agencies but don’t count on it . It is extremely unusual for them to agree to such a plea but just because you will try may satisfy the homeowner even if denied.   

How a Short Sale Affect Future Home Purchases
Even though this home may be lost to foreclosure many homeowners will want to own a home again . They will likely ask if that will be conceivable if they do a Short Sale and is there any benefit by doing so. Usually homeowners who have a home foreclosed must wait a minimum of two to five years before they try to buy again. According to Fannie Mae guidelines homeowners may try buying another home only two years later a short sale. Considering the nonpayment that’s a pretty short duration of time. Hopefully this information answers this question and the conversation ends on a positive note. If you can motivate them to begin improving their credit and save for a future down payment for their next new home.

Once you answer questions about Credit Score and Future Home Buying then it’s time to explain the Short Sale process to the homeowner .