Short Sale Pros and Cons

Avoiding Foreclosure: The time spent for the foreclosure process can take anywhere from 6-12 months for completion and the credit rating that a borrower will have to deal with can be devastating. The short sale process can dramatically reduce your time and help you take control of your debt.

Losing Your Home: Obviously, the biggest drawback of a short sale is the loss of your investment and home which can be an emotional challenge. That's why JohnHart will try their very best to make sure the short sale process is as stress-free and easy for you as possible.

Recoup Faster: Since the damage to your credit score is often minimized with a short sale, you'll be able to get back on your feet and be eligible for a property purchase and usually re-qualify for a mortgage loan faster than if your home was foreclosed upon. Also, the entire process of a short sale compared to a foreclosure is generally faster.

Credit Score: Although it is better than having the stain of a foreclosure on your credit history, a short sale will still affect your credit. In order to qualify for a short sale, you usually will have to be late on your mortgage payments, \which in turn, will negatively affect your credit. But, waiting two years in comparison to seven years to purchase a new home after a foreclosure is often "the lesser of two evils".

Cost: JohnHart offers a cost-free short sale process, we will keep you in your home rent free until it sells, and we'll negotiate moving expenses paid by the lender or bank.

Lender Denied: Unfortunately, the bank or lender does not have to agree to a short sale. Luckily for borrowers, the losses from the foreclosure crisis of 2009 make it in the best interest of the bank to agree to the terms of the short sale. If your home is instead foreclosed upon, they will have to pay costly fees and risk non-payment from the borrower.

Bank Forgiveness: Many banks will forgive your remaining balance you may still owe after selling your home at the short sale price.

Tax Penalty: If the bank approves your short sale, there may be tax consequences such as the possibility of a 1099 taxable income.**