Real Estate News

When you approach a homeowner about doing a Short Sale first and foremost on their mind is how a Short Sale will affect them. You have to answer give them an answer to this question quickly or or this discussion will end pretty soon . Mainly two questions need to be addressed: Credit History and Future Home purchasing.  

How will a Short Sale Affect Credit Score
Often homeowners mistakenly think they are preventing damage to their credit if they agree to a short sale as an alternative to a foreclosure but that simply isn’t the result . In many cases their credit is already tarnished if they haven’t been paying their mortgage payments on time . The unfortunate 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 does for a short sale. The best thing you can try as a Short Sale representative is to request that the lender not send a negative score to credit agencies but don’t expect it . It is very rare for them to agree to such a plea but just because you will try may appease the homeowner even if the request is denied.   

How Does a Short Sale Affect Future Home Purchases
Although this home is likely lost to foreclosure many homeowners will want to own again . They will want to know if that will be conceivable if they do a Short Sale and is there any advantage by doing so. Usually homeowners who have a foreclosed home must wait at least two to five years before they try to buy again. According to Fannie Mae guidelines homeowners can try buying a home again only two years later a short sale. Considering the default that’s a relatively short duration of time. Hopefully this information answers this question and the conversation ends on a positive note. Encourage them to begin rebuilding their credit and save for a future down payment for their next new home.

After you discuss the issue of Credit Score and Future Home Buying then you can begin to explain the Short Sale process to the homeowner .