The Tucson Real Estate Forum!

If I do a short sale on my property will it effect my credit.

Yes it can.

Your mortgage can show up on your credit report as a "charge off" in some instances. In most cases, whatever amount that was not paid will also be counted as personal income which you will have to pay taxes on as well.

Mortgage lenders have also been known to come after you and make you pay the remaining balance of the mortgage, sometimes allowing it to be amortized over 10 or 20 years, after doing a short sale.

There is a lot that can be negotiated however and it is important to find a Realtor or investor who is EXPERIENCED in doing short sales and can negotiate a fair deal on your behalf.

If you are interested in doing a short sale, contact Josh Miller (the forum admin / loan officer). He can probably put you in touch with someone who can help.

Would you consider working with (mentoring) someone who wants to learn how to work with pre-foreclosures and short sales? I have studied quite a bit about the two and I'm now wanting to put my studies into practice. Being new and green as grass at this I will need the help of someone who's ben in the "game" awhile. If you are willing to work with a novice please get back in touch with me. Thank you for your time and consideration.

Yeah if you're worried about your credit, I wouldn't get involved in trying to negotiate a short sale, unless you're in absolutely dire circumstances and don't have a choice.
Lenders will think long and hard before touching you again if they see you couldn't pay your last mortgage.
Best of luck,
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Brian
Rental Application

A Short sale is where the lender agrees to accept an offer for a house that is less than the amount owed on the mortgage. Short sales happen when the owner is behind or about to become behind on their mortgage and want to avoid foreclosure. Moreover, if the home is located in an area where home prices are on a decline, then it may be sold off for less at a price that isn't enough to cover the loan balance.

A short sale is less damaging to your credit score than a foreclosure. Your FICO score will drop by 75-100 points if you do a short sale, compared to 250 if you get a deed-in-lieu.

By attempting a short sale, the borrower can avoid foreclosure and a decrease on their credit score. Moreover, a short sale may be faster and less expensive compared to foreclosure.

I know there is some great information available here for short sells and yes it will have an impact on your credit scores. It will be much better than going bk, that is for sure.