No matter where I look, all I see and hear are short-sales. They seem to be the biggest ticket item out there. I have met with and spoke to many sellers, Loan Officers and Realtors who claim to know all about them but have no idea how the process works or why a short-sale is a better alternative to a foreclosure. For the seller, a short-sale is better because you are able to buy a new home just 2 years after the short-sale; a foreclosure keeps you renting for at least 5. For Realtors and Loan Officers a short-sale is the only way to get paid on a transaction. A short-sale is generally better for the lender as well because it keeps the house occupied with the water and electricity on, saves it from squatters and (generally) keeps the lawn mowed, not to mention they lose a lot less money.
That's all good and fine. I'm sure you can read all about this in 100 other blogs or websites. But, for the seller's... what happens AFTER the short-sale? What are their options? Where do they go? Where do they live? How?
Depending on your situation, your previous mortgage and your attitude, your credit may be completely shot or you may just have some blemishes from the previous mortgage. The most severe credit issues will probably leave you a renter for a short time while those issues are worked out. I hope you saved the money you weren't using for your mortgage because your new landlord will probably require a few months security deposit. Don't want to be just a renter? Perhaps a lease-option would work for you. This topic requires a few posts on its own but can be a great way to get back into the game in no time. Besides renting or lease-optioning you could live with relatives or friends. Perhaps they could move in with you BEFORE the short-sale to help make payments?
If you can or can't get the rest of your finances in order, if you file a bankruptcy, if you short-sold 50% less than you bought it for 18 months ago, if you have more collections than open tradlines.... whatever you've been through, a good credit repair company or legal firm could help you get things back in order. 2 years to buy again after a short-sale? Yes... but thats assuming the short-sale remains on your credit. Yes, even the ugliest of credit can be cleaned up legally and efficiently. Credit reporting guidelines and the 3 bureaus give you the MAXIMIM amount of time items remain on your credit, but whats the MINIMUM?
No matter what you do, a priority should be to get your credit back in line. Don't wait for it to fix itself because you will be waiting a long time. The sooner your credit is back to where it was pre-disaster, the sooner you can own a new home. Perhaps you can buy an exact model match for half the price? I recommend two credit restoration companies one is slow and cheap, the other is fast and not as cheap. Either way you will get the results you need, just a matter of how long you want to wait and how much you want to pay. Good, Fast or Cheap.... choose two!
Let me know how I can be of service to you.
Michael Wolff
