Short sales are a fast growing alternative to foreclosure. With a short sale, the bank allows you to sell the home for less than the amount of the loan (which "shorts" the bank, hence the name.) It is a great option for lenders, because it is far less expensive than a traditional foreclosure, and can often go through much faster.
As a homeowner, a short sale is a great opportunity because the impact on your credit can be much smaller, staying on your credit report for 2 years, as opposed to 7 for a foreclosure, and 10 for a bankruptcy. It also gives you more control over the transaction- You are CHOSING to sell your home as opposed to having the choice, and the home, taken away from you as in a traditional foreclosure.
With all the benefits of a short sale, there are some negatives to consider. Short sales usually require a great deal of paperwork, which can be confusing to homeowners. It is ESSENTIAL that you work with an agent who is trained in dealing with short sales, and has successfully navigated through them in the past. Now, more than ever, is when you need a professional. We have worked with several homeowners to help them avoid the scary, and embarrassing process of foreclosure. For them, a shot sale gave them the option to move on, and start over, with as little financial impact as possible. Call us today if you are thinking about a short sale. We have been designated by the National Association of REALTORS as a Certified Short Sale and Forclosure Resouce (SFR). We will be happy to discuss your options and help you make the most informed decision possible.
Please keep in mind, that you should always consult your tax preparer, or legal council to discuss all possible consequences, before deciding to engage in a short sale.