Short sale vs. Foreclosure

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Short Sale

The Borrower (Owner) is no longer able to make their mortgage payments and owes more on the loan than the home is worth.  Many homeowners have hardships such as loss of a job or divorce which adds stress to their financial situation.  Short sales are a good option to avoid foreclosure.  Lenders are under no obligation to accept or approve a short sale.  It is simply a request and not a guarantee.  Short sale proceedings can be lengthy in time, taking an average of 3-6 months to close, but can vary on a case-by-case basis.  Short sale will however have a shorter impact on your credit.


The lender starts foreclosure proceedings and can take 30 days after a Notice of Default (for non-judicial foreclosure) is issued to plan a sale date for the property.  In Washington State, a foreclosure can be set 90 days from the date of Notice of Default expiration.  This Notice is sent to the sellers by the Trustee in the mail as well as posted to the property.  Sellers will receive a Notice of Sale in the mail setting a sale date to auction the property at the courthouse (unless it is a Judicial foreclosure, which is handled by the Sheriff’s office).  During this time, if a short sale is initiated with the lender, we can usually get the sale dates postponed or stopped.  Some lenders, however require a certain amount of time to review for short sale prior to the foreclosure date (speak with a realtor immediately in this case).  Foreclosure can have a longer impact on your credit.

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