Home Selling in 07438>Question Details

Carol, Home Seller in 07438

in ct. can i buy a home after i do a short sell in nj. can not sell in nj so maybe a short sell is for us ?

Asked by Carol, 07438 Sat Jan 10, 2009

our home has been on the makert since april 2007. we have a 2nd morgtage,and they want us to lower the price but if we do we will not be able to pay the debt. Help....

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Hi Carol,

Basically, your are in what has now become a common scenario. You need to sell short to move out of your home.

The first question is whether you are current on your payments. If you are current, you will most likely not be able to do a short sale. Most banks will not entertain a short sale unless you are in arrears. Although a few will under certain circumstances. Nevertheless, usually not.

If you are behind, your position becomes stronger as far as getting the bank to agree to a short sale.

However, you will not be able to buy in Connecticut if you sell short here. A short sale will kill your FICO score to the tune of 200-350 points, and that's on top of any decrease that has already accrued if you are late on your payments. Really a short sale and a foreclosure have similar effects on your credit. In other words, bad.

If there is no way you can stay in your home and ride out this recession and you are current on your payments and your FICO score is good right now, you might have to consider the option of walking away from the home and using your good credit to get established in Connecticut with a rental while there is still time.

Once you are foreclosed or sell short, life does become harder because everyone uses FICO scores today. Insurance companies, landlords, even employers. So if it is an emergency situation and the outlook here is hopeless, you might have to use what is left of your good credit score for a quick re-establishment before your credit score gets killed following foreclosure or short sale. I am not advocating this, but it is something to be considered in consultation with your attorney and/or financial advisor.

So your best option is to stay put or figure out a way to sell your home without selling short. You might want to consider credit counseling. Perhaps you can do what is called a workout. That is where the bank renegotiates your interest rate and/or principal to keep you in your home. That is being done more and more these days and is superior to a short sale or foreclosure.

In the final analysis, do everything you can to avoid a short sale or foreclosure. These options are last resorts that will kill your credit rating.

If you need further help, contact me via my profile. Good luck!


Marc Paolella
Relocation Director
Member, Worldwide ERC
Licensed Realtor NJ
Licensed Appraiser NJ & NY
Century 21 Joe Tekula Realtors
Agent of the Year 2008
Owner: Sands Appraisal Service, Inc.
Phone (direct): (973) 584-4235
web: http://www.marcpaolella.com
1 vote Thank Flag Link Sat Jan 10, 2009
I concur with the advice given by Pamela Woodward - BUT, the bank is not required to give you a "short sale" for your current home. You must sell your financial problem to the bank in a letter of hardship. That means they want to know why you can't make the payments and that your other resources to meet your obligation to pay your debts has been exhusted. Each short sale and every bank handles short sales a little differently but, wanting to move to Connecticut is not going to win them over.
Web Reference: http://GregoryBain.com
1 vote Thank Flag Link Mon Jan 12, 2009
Hi Carol,

The situation you are in is very difficult. However, what I tell clients of mine is that your home is worth what it is worth, not what you owe on it or what "you need". If you have confidence in your Realtor, then listen to what price is being recommended to you because right now it is all about price to consumers. I have heard from various financial people that a short sale will cost you about 100-150 points on your credit report but that you could gain many of those points back within 6-12 months if you are current with all your other bills. A foreclosure is much worse and will have far greater impact on your credit history for years to come. Reduce the price, get the good qualified offer and then bring that offer to your bank....letting them know that you have had it on the market for almost 2 years and whatever else your agent has done to get you an offer. They will more than likely listen because the bank does NOT want another home in their inventory. Good luck!
1 vote Thank Flag Link Mon Jan 12, 2009
From a credit standpont a short sale is just as bad as a foreclosure. A short sale is considered a "foreclosure action" and most if not all lenders will view it this way regardless of your credit score. I would follow some of the advice of others in so far that if your score is not tanked already get yourself set up because the current lending climate is that any foreclosure will disqualify you for a mortgage for at least 4 years.
0 votes Thank Flag Link Mon Jan 12, 2009
Hi Carol,

I understand your situation but it's reality for many people. Is this possible for you to put on rent rather then sell. May be summer will help you. I have house in CT which is so beautiful was not able to sell by another realtor in time frame so i put that one on Rent & everything is going good now. Which part of CT you thinking top move? anymore questions email me.
0 votes Thank Flag Link Sat Jan 10, 2009
Have your agent contact both mortgage companies and find out what they will take for a short sale. A short sale will affect your credit, but you'd have to speak to a mortgage representative to find out what impact the short sale will have on your credit and ability to purchase another home.

Laura Giannotta
Keller Williams Atlantic Shore
0 votes Thank Flag Link Sat Jan 10, 2009
Confused from your question HOWEVER if I understand the question:

If you want to sale your home via a short sale requires lender approval by submitting a hardship package and other documents required. Lender will forward their specifications.

Can you purchase after you sale your home, it all based on credit scores, debt ratio, employment history, downpayment. Short sale will tank your credit could be up too several years prior to able buy another home.
Web Reference: http://www.lynn911.com
0 votes Thank Flag Link Sat Jan 10, 2009
It seems the general consensus from the professionals on this board is that if you hang on to an unrealistic price just to cover your mortgage, it will cost you more in the end. As for as the first part of the question as well as the second, I really no nuthin.
0 votes Thank Flag Link Sat Jan 10, 2009
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