(305) 793-1365 restivomiami@gmail.com

Short Sale or Foreclosure – Best Option Regarding Credit Reporting?

October 13, 2011

P R O P E R T Y   S E A R C H

R E S T I V O – H E C H T M A N    T E A M

Why opt for a short sale over a foreclosure?  

If you owe more on your mortgage than the current market value dictates your property is likely to sell for,  a SHORT SALE can enable you to get out from under your debt provided that your lender accepts a lesser payoff  amount.  According to Christopher Reale, Director of Short Sale Operations at Lepizzera and Laprocina Title and Escrow Services,  financial recovery after a SHORT SALE can begin within 30 days after the sale takes place.  Often the lender will forgive the balance,  reporting a zero balance to the credit agencies – although the payoff may be considerably below what’s actually owed.

The stigma of a foreclosure on the other hand can delay the seller’s financial recovery considerably.  More often than not the lender will  report any deficiency balance remaining (directly  to the  credit reporting agencies).   Legal fees and asset preservation costs can also be tacked on to that deficiency amount. … increasing the  ‘debt’ shown.

Both a SHORT SALE and a FORECLOSURE rely on an appraisal … along with a BPO (Broker Price Opinion) and/or a CMA (Competitive Market Analysis) in order to determine value…

While  the experts differ on their assessment of  benefits (buying or selling a short sale versus a buying or selling a foreclosure),   in our experience each tend to sell below market value…. benefiting the buyer. 

A SHORT SALE may well benefit the seller, because the stigma is less (than with a foreclosure) , and  the timeframe for financial recovery is less… but don’t rule out the option of a LOAN MODIFICATION if you are having trouble holding on to your home. Many banks are willing to consider loan modification as an option (keeping  homeowners from losing their homes).   It’s a quagmire of a process … with a myriad of options … and it really requires that you consult with a local real estate attorney specializing in short sales and foreclosures .

If you are looking for distressed property to invest in,  and are looking for a Realtor,  please call us.  We are also more than happy to give you the contact information for several local attorneys who specialize in short sales.

 The Restivo Team  at EWM Realtors – Miami Florida –  305 793-1365  – restivo.v@ewm.com .

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