Does a Short Sale affect my credit differently than Foreclosure?

Are you considering a Short Sale in the Avondale, Goodyear or Litchfield Park area but unsure how it will affect your credit? A short sale may be considered to be a derogatory mark on your credit even though credit bureaus do not show the word “short sale” on your credit report. It may say “paid in full for less than agreed” or similar category.   Some clients have reported negative FICO score drops from 50 points to 130 pointswhile the drop is 200 to 400 points after a foreclosureGenerally this credit score will remain on your credit report as a public record for 7 to 10 years.

All lenders report short sales differently and some do not report them to the credit bureaus at all. However a Foreclosure stays on your credit report for 7-10 years. If a prospective employer runs a credit check on you, your job application may be denied if you have a foreclosure on your record. In this job market, it’s an important factor to consider.

Another thing to consider, Loan applications do not ask questions about a short sale. You may report that you sold your home. However with Foreclosure, you are required to answer the question: “Have you ever had a property foreclosed upon or given a deed-in-lieu thereof in the past 7 years.” If the bank sees you have had a foreclosure, your loan most likely will be denied. If you lie, you may be subject to investigation by the FBI for fraud.

With so much to weigh out, it’s important to speak to a Realtor that is a Short Sale Specialist and can answer your questions, identify your options and assist you in being proactive.  Keith and Cheryl Krone have been Realtors since 1983; and for the last 3 years have specialized in Short Sales in Avondale, Buckeye, Goodyear and Litchfield Park. To schedule an appointment to discuss your unique situation, contact Cheryl at(602) 708-2073 or

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