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Sellers - Is A Short Sale A Viable Option for You?
January 11, 2011

Are Short Sales a Viable Option for Sellers?
For many sellers this is a viable option; however be assured that you must prove that you have a hardship. The following criteria are just some of the hardships that the lien holder may grant a short sale status on, but there are many factors:
Death of Princiipal Borrower
Death of Principal Borrower Family Member
Serious Illness
Marital Problems (Divorce, Separation)
Unemployment
Lessened Income
Excessive Obligations
Long Distance Employment Transfer
Military Service
Unable to Sell Property or rent Property
Principal Borrower has Business Failure

If you feel you may qualify, whats your next step?
Call a realtor who has past experience in short sales and can advise you. There is a possibility they can work out something with your lender where you can stay in your home.
If they feel you have a potential short sale, they will contact your lending institution; obtain the package that must be filled out and sent back to the lending institution; and they will speak to the lending institution, with your permission, through the whole transaction.
The realtor will place the property for sale and keep in constant contact with the lending institution for you.
Is there an advantage to going this route?
It is not as distressing as facing possible foreclosure
Your future purchase will be driven by your FICO credit score
And sellers take a bigger hit on their credit scores if they have a foreclosure vs. a short sale. Of course, this could change also. In a foreclosure your score can be reduced from 259-280 points, but with a short sale it could be reduced from 80-100 points.
The waiting time to buy another home is also a consideration. With a foreclosure, it can be 3 to 4 years before a lender will give you a reasonable interest rate and only 18 months to 2 years on a short sale.