Short Sale Advise

Without more information, it's hard to tell. A short sale looks almost as bad as a foreclosure on your credit, because your lender will report a write-off. That's sort of like having a loan of $x and defaulting on it. (Say if your loan is $200,000 and you can sell the house for $150,000, then they have to write off $50,000.) But, if your other choice is going through foreclosure, then sure, short-sell the house. Something to think about is that the bank(s) who hold hold loan(s) on the house will have to approve the price of the sale. It's a looooong process and a lot of realtors won't even take their clients to see short-sell houses. My husband's a realtor and one of his clients is in a short sell contract right now, and it has been dragging on for 5 months now. AND now the first mortgage is making noise about not wanting to accept the sale price. It's insane.

I'm not sure why you need to sell your house, but you could also think about renting your house out. If you could get renters to cover most or all of the mortgage, that may be one way out without selling the house just yet. If renting won't cover anywhere near the mortgage amount, then you can try to negotiate something with the lender(s) to lower your payments. It's not easy, but sometimes they will work with you. Worse comes to worse, short sell it. It's not the end of the world. We had a failed short sale on our last house, and it ended up being foreclosed upon (we bought at the height of the market in 2006 and then my husband became unemployed... sort of the perfect storm financially). Actually, it wasn't nearly as horrible as I'd expected it would be. We lived through it, got out from under the house payments, and are in a much more affordable situation now. Life moves on!

Good luck with everything.

I'm a real estate agent here in Bakersfield and Short Sales can be beneficial if you can no longer afford your mortgage payment. If you have liens (other than bank loans--a 1st and 2nd are okay) it can really complicate the process (this means that someone has won judgement and is owed money if you sell your house--like a pool company or other contractor or federal or tax liens or child support). Short sales are less harsh on your credit score and you could possibly buy in 2-3 years again (while the market is still low) if you keep everything else on your credit up. It is a lot of paperwork--more than when you get your mortgage loan and it can take a long time (3-9 months)--the banks have to approve them. It seems to work out better is you move and have your home vacant. As long as your home is priced at true market value, you should have no problems getting offers, interest rates are great and homes are affordable right now. I think the hardest part about it is that you are losing your house and someone is paying so much less for it than you did. If you short sale though, you're in control of what offer to initially accept, and you will be able to rebuild your credit more quickly than if you foreclose. Like any busy, communication is the key, you need a real estate agent that will answer all of your questions and communicate with you about the ongoing process.

i just closed our short sale at the end of october it did take a little while and i stayed in the house until it sold in late September. it is a long processes and i have no regrets. short sales are not as bad as some people make them out to be. i bought my house when i was 23 did not fully understand what i was getting into with an adjustable interstrate. it was sad to see my house go but in a few years i am hoping to rebuild my credit and buy again in an area we now love. maintain the home do not put any money into fixing it up it is not worth it since you will not be seeing any of it back. keep in mind that it will take a long time about 4-6 months quicker if you are only dealing with 1 bank and a buyer that is willing to wait it out. the only thing i wish i would have done diffrently was done the short sale sooner. i emptyed out my saving and all of my retirement accounts just trying to stay current on my loan when my husband and my self lost our jobs within a couple of month of each other. we stayed in the house for a few months saving what we were normally paying in mortgage and used that to get a deposit and 1st and last month rent for a house in a nicer area and in the school district we wanted our kids to go to. if it is a thought at all in your minds right now i would recommend talking to an agent now to figure what the next step is and if it is something you want to do. our short sale listed in April we had a buyer right away that really liked the area and stayed the whole process we would have closed sooner but had problems on our second to agree to the price. if hurt my credit but it is much better than a forclouser and now we don't have to worry about making next month mortgage payment and aren't living month to month.

I got to tell you we did a short sale almost a year ago and it was the best thing we could have done. The Realtors that we worked with made things happen in just a couple of months. They had people coming over ALL the time to see the house and they got multi offers. I really dont have any advice or regrets but I just wanted to tell you it was defintaley not as bad as some people make it sound. We did have a 1st and 2nd with the same lender so apparently that makes it a little easier too rather than having to deal with 2 lenders and getting them to agree I hear is a real pain. Anyway, good luck!