The difference between your home’s selling price and your mortgage balance, known as the deficiency, is probably the biggest factor in short sale credit effects. Lenders will try to earn as much as possible from the sale to make up for their losses or at least minimize it. Your Realtors goal is to try to sell it for as much as possible. The less the lender has to forgive from your balance, the lower the short sale credit impact will be.
There aren’t many rules on how a short sale should be reported, so lenders tend to word them differently from each other. What appears on your credit report. Your credit report can either be a “pre-foreclosure in redemption”, “paid as agreed”, or even a straight forward closure. This depends both on your mortgage situation and your lender’s policies. It is always recommended to engage an attorney, and if you have a capable agent, he/she may be able to make recommendations on how to engage an attorney to discuss this matter more in-depth with your Lender and have it worded so that the short sale credit damage won’t be as high.
Fixing the Damage
Once the short sale has closed, you can start working on getting your credit score back up. Start by saving up as much as you can, so you’ll have liquid funds for emergencies instead of taking out more credit. Limit your credit cards to just one, and use it only when you need to. If you’ll be renting a home afterwards, be sure your rent is paid on schedule so that your landlord will report positive reports to the credit bureaus and so you can build a good rental history and improve your credit score faster.
I would be happy to meet or speak with you to discuss your options. As a Certified Negotiation Expert and a Short Sale & Foreclosure Resource, my qualifications permit me to provide you with superior service based on experience and knowledge.