Short Sale vs. Foreclosure

If you happen to find yourself in a bind, and can’t keep up on your mortgage payments, you will probably need to try to sell your home as quickly as possible. So, what do you do? At this point, many people have to start considering a short sale or a foreclosure, both of which are bad for your credit, because they are both considered a debt that has not been “paid as agreed”.

But is one worse than the other overall?

What are the differences?

How do they compare?

Here is a quick breakdown of what it looks like to have a short sale vs. a foreclosure….

Short Sale

  • Typically an 85-160 point drop to your credit score
  • Average time short sale-ers wait to buy a home: 2 years
  • However, you are immediately eligible to purchase another home
  • You are viewed as a more responsible homeowner (versus someone who had to go through foreclosure)
  • Could qualify for $3000 for relocation through HAFA (Home Affordable Foreclosure Alternatives)


  • Typically an 85-160 point drop to your credit score
  • On average, it takes people 7 years to buy a new home
  • You are not eligible for immediate purchase of a new home
  • Creditors view you as irresponsible
  • Cannot qualify for relocation funds

While neither of these represent an ideal situation, we hope this information gives you a little insight on your options. If you have further questions, please contact us. We are happy to help!

To read the original article on short sale vs. foreclosure, CLICK HERE.


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