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Can you do a short sale and not hurt your credit?

I lost my job back in February.   Since then, I found another job, but need to move.  I have had the house on the market since March and haven't had one offer.   If we lower the listing much more, we will sell it for less than what we owe.   Is there any way to get out of it without hurting our credit?   We also haven't missed a payment.   
  • December 27 2010 - Polk City
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Answers (10)

Fair Issac released a report that says credit is affected about the same.  The average points lost on FICO are as follows.

- 30 day lates 40-110 points
- 90 day lates 70-135 points
- Foreclosure, short sale or deed in lieu of foreclosure : 85-160
- Bankruptcy 130-240.

I hope that this helps and good luck. Jacqueline
  • January 11 2011
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Credit is hurt when a mortgage payment is delayed, not paid. A short sale will be approved only if you are not paying your mortgage so its a sine qua non question, there is no way to avoid it. A short Sale Agreement between you and your lender will be be better than a foreclosure and once accomplished you will pull out the dagger and healing will start. Damage is already done.

  • January 07 2011
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Unfortunately, the answer most of the time is "no." 

There are many variables that are involved in any sale for less than what you owe, however. Depending on where you live, you will need the assistance of a team of professionals to provide the best assistance: a Realtor® experienced in this type of sale, a foreclosure attorney, an appraiser, and possibly an accountant. Your situation will determine what needs to be done to provide the best possible representation. 

If your Realtor® is experienced, you will have a resource to help you assemble your team. Just don't go it alone.
  • January 04 2011
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Profile picture for Tyler Rygmyr
Your credit will be affected if the bank reports it to the credit bureaus.  Several lenders have told me that the best way to minimize the credit sting is to keep current all the way up until it closes, and pay all your bills on time after the short sale without having any slow pays.
  • January 03 2011
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Your credit WILL be affected by a short sale.
  • December 28 2010
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NOPE....
  • December 27 2010
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How your credit is affected by a short sale is one of the most misunderstood things about a short sale.  You can short sale, even without missing a payment, but you will most likely still have it reported to your credit as a "Settlement", or "Paid as agreed for less than the full amount".  The average hit to a FICO score is 75 points, but the better your credit, the worst the hit.  someone with perfect credit could see as high as a 250 point hit!  if your credit is under 580, you may not see a decrease, and in some cases may actually increase (because you are also eliminating debt).  If you are with any large national bank, they will report, but it's possible with smaller banks, credit unions, etc to negotiate as part of your sale how it's reported, especially if they retain a deficiency.
I'd love to help more if i could, www.HopeAdvice.com is a great resource.
Rob Stewart,
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  • December 27 2010
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What effects your credit is the missed or late payments, not the short sale process. Talk to an attorney is you have more questions.
  • December 27 2010
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Profile picture for Eric Ropp
It honestly can be done. You are in the right situation to do so too. Its easier if your mortgage is with a small or local bank. Stay current and do everything they ask of you as fast as possible. Try to stay in contact with the same person through the process and if they require you to miss a payment to close after you have an accepted offer that is going to short the bank get in writing that they will not report the one missed payment to the credit companies. Good Luck to you! You can pull this off is every part falls in your favor. Not going to be the funnest, fastest process!
  • December 27 2010
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No you cannot do a short sale without brusing your credit, but there are several ways you can do a short sale and minimize the damage.  For example depending on your lender, you can short sale your home and never miss a payment, which does minimal damage to your credit.  Certain lenders like Bank of America require you to be 30 days behind to even consider the short sale. Hope this helps.
  • December 27 2010
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