Why A Short Sale

Foreclosure should be the last resort, when all other options fail. Many homeowners can     successfully complete a short sale if they: 

 1. Begin a soon as they are about to go delinquent on the loan.

 2. Complete the necessary paperwork and

 3. Hire a competent real estate agent to handle the sale.  Be aware that some agents charge an upfront fee to take on the task of a short sale. At Gator Homes Realty do not.

The primary benefits of doing a short sale are, first protecting your credit. While both the short sale and foreclosure will affect your credit, a foreclosure will greatly impact your ability to purchase a home in the future. Fannie Mae has announced changes that went into effect August 1^st, 2008.

You cannot purchase a home under the following guidelines and time frames using Fannie Mae Conventional financing:

• Pre-Foreclosure (short sale of home); 2 year
• Deed in lieu of foreclosure; 4 years

 People who foreclose will have the following Fannie Mae restrictions placed on them:

•  5 year time period from date of foreclosure completion in which you cannot obtain financing, after which you can finance with a minimum of 10% down and a credit score of 680. 
• 7 year time period from completion to finance a second home or investment property.
• 7 year time period from completion to take cash out of a refinance on any property regardless of occupancy.

 Additionally, some employers may not hire or retain an employee who has foreclosed on a home.

 The emotional impact to borrower who has a foreclosure cannot be underestimated.     

Despite the time involved in doing a short sale, there is an emotional benefit to doing the “right thing”.

Also, where a homeowner has continuing liability for a loan (such as a Home Equity Line of Credit) after foreclosure, the borrower can take some measure of control and mitigate the loss with a short sale.