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i have a rental property which has dropped significantly in price.

I would like to know what the repercussions are of foreclosing/short selling/ DIL. Which would be the best option?
  • August 02 2012 - San Diego
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Answers (6)

There are many factors you need to consider. A short sale will hurt your credit less than foreclosure... However I would need to know more details of your exact situation, the rental amount, and the value of the property in order to give you better information and recommendations

  • January 17 2013
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My experience is that DIL are very hard to get approved especially in this short sale season.  I know in Prudential we have an expert whom used to be on the banking side.  He can provide you with better details.  If you would like please shoot me an email and I can forward you his info.  

Kind Regards,

Sam
  • August 03 2012
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do i have to prove financial hardship for a DIL?
  • August 03 2012
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Hi,

It is important to know how upside down you are and is the rental paying your mortgage or close to.  Currently home prices are rising fairly quick since January, therefore you may be getting closer and closer to being able to sell and not have more losses.  Please let me know if I can further assist you and help you find out how close you maybe to your exit strategy.

Kind Regards,

Sam 
  • August 03 2012
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Good Morning,
I really like what Cory had to say below. Your best option is determined by what your motivations are. How much of a loss are you taking per month? Or is it just a matter of, the value will never get that high again and I just want to unload. I would be happy to help run numbers with you. Feel free to contact me directly to talk.

Thanks!
Sinead McAllister
Broker
McAllister Homes Real Estate

  • August 03 2012
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I understand your predicament, you're in good company, I assure you. Both options will affect your credit a LOT. Agents will say a short sale won't affect your credit as much, and it will be a little less than a foreclosure, but not much as far as FICO score goes. It's still a huge amount of a debt you didn't pay, whether the bank agrees to a short sale or not. Most banks won't do it until you're late on your payments. One 30-day late payment drops you credit score; imagine what several more will do. Agents like to get listings, but a good agent won't take a short sale listing unless you can prove a hardship on paper. Neither is a good option, and you'll need to prove that financial hardship to short sell it; it can't just be an inconvenience.

Please let me know if you need any more information.


  • August 03 2012
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