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The Business of Real Estate

Short Sales and Credit Ratings


I just added this  very good article to AustinMarketInfo.com:

Will a Short Sale Save Your Credit?

I have seen ads and heard real estate agents suggest that a short sale will prevent the damage to the homeowner’s credit standing that foreclosure would cause. Not true.

As the article points out, whether a homeowner completes a short sale or loses a home through foreclosure, the mortgage lender ends up collecting less than the mortgage contract called for. Under no circumstances is this a “positive” on the borrower’s credit report, and it will impact credit scores.

In many cases, the impact of a short sale may not last as long as a foreclosure would, but even that depends on the borrower’s mortgage payment performance before the short sale, other write-off or collection accounts, renewed performance after the short sale, and many other factors that the industry considers risk indicators.

“Beware the Web …,” the article says, and that’s good advice in many areas of life. There is a wealth of information available on the Internet, but distinguishing reliable information from bad (or just oversimplified) advice is often impossible.

If you’re struggling with a mortgage and considering your alternatives, the best advice is to begin communicating as early as possible with your lender and with financial and real estate professionals. Just assuming that there’s nothing you can do is clearly a road to the worst outcome. Getting good advice early will give you the best chance of resolving a very bad situation as well as possible.

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About Bill Morris, Realtor

More than thirty years of business experience (high tech, client service, business organization and start-up, including many years in real estate) tell me that service is the key to success and I look forward to serving you. I represent both buyers and sellers throughout the Austin metropolitan area, which means first-hand market knowledge is brought to bear on serving your needs: -- Seller Representation is a comprehensive process that begins with thorough market analysis and consultation, continues with properly staging the home to achieve the highest price possible in a reasonable time on market, a complete program of marketing and promotion, ongoing updates and communication, closing coordination, and follow-up throughout (and after) the sale. -- Buyer Representation is also full service: shopping, previewing, price and market consultation, contracting, negotiating, coordination of inspections, appraisals, repairs, and closing details, and follow-up beyond the closing of your purchase to ensure your lasting satisfaction. Because the real estate industry is becoming more sophisticated and challenging every day, you need a professional that understands the industry and is positioned to stay ahead of the game. I go the extra mile to help you achieve your goals. That's why I constantly research the market and property values so your home is priced effectively from day one. I also make sure the public knows your home is for sale by using innovative advertising and marketing techniques to attract potential buyers.

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