Rental Basics in 08753>Question Details

Teresa, Home Owner in Ocean County, NJ

In it easier to get someone to rent to you if you had a short sale vs foreclosing?

Asked by Teresa, Ocean County, NJ Sun Sep 30, 2012

Im still figuring out which way to go and discussing things with my lawyer. But I want a realtors opinion on what YOU have personally seen in regards to ease of renting. I know both impact the credit but FC is worse. Would it be easier finding a house to rent if I had a short sale?

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Maria Cipollone’s answer
In this case is better to get in touch with a real estate agent specialized in short sales than a lawyer. The same agent can help you to find a rental after your short sale is approved and you need to move out. Yes, is easier to find a rental with a short sale than a foreclosure.

Best of Luck,

Maria Cipollone
1 vote Thank Flag Link Sun Sep 30, 2012
I agree with Laura - and I think you could make similar case on your own behalf to a prospective landlord.

I do recommend that you work with an attorney with short sale experience - and it is a good idea to work with an agent that has short sale experience if you go that route.

Good luck to you,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
0 votes Thank Flag Link Thu Oct 4, 2012
As a REALTOR, and landlord, I would prefer to rent to someone that was willing to face their problems with paying what they owed and tried to work it out (short sale), vs someone who walked away or threw up their hands and walked away (foreclosure).
0 votes Thank Flag Link Mon Oct 1, 2012
Alicia, I believe one of the partners on my team may have answered you already. However, if we had a chance to sit down and go over your situation we could really tailor a game plan for you. It could involve a refi to today's rates not even taking into consideration your loan amount, a short sale were you could walk away with money in your pocket (4 out of the last 5 of my clients did just that), or even a deed-in-lieu if you choose to. Feel free to call me at 732-644-9084 so we can discuss. Our knowledge is always free and I want you to be as informed as possible when going through this. What you do now will shape your life for years to come.


Thomas Zdanowicz
RE/MAX Real Estate LTD
The Ocean's Six Group
0 votes Thank Flag Link Sun Sep 30, 2012
As far as rentals. In the short term it does not matter you will have bad credit in either case. your credit can improve sooner with a short Sale vs a forclosure
0 votes Thank Flag Link Sun Sep 30, 2012
As you can see, there are varying opnions. My thoughts are that while an attorney will tell you to stay as long as you can in the home and save on the payments you are no longer sending to the bank, I would rather see you get out and rent before your credit score is affected. You may have all that money in your pocket, but due to your financial situation (i.e., the short sale) your choices of a rental will be limited.

As for short sale vs. foreclosure, I side with short sale.

Francesca Patrizio, Broker Sales Associate
0 votes Thank Flag Link Sun Sep 30, 2012
Your credit score is affected either way. If I was a landlord and you went thru a foreclosure or a short sale I would not look upon you as a bad paying person. Especially in this environment. With so many people facing foreclosure and distressed sales, it is hard pressed to fully determine a renters ability or reliability based only upon their credit report scores alone. But when looking at a credit report as a landlord, itemization of each credit deficiency can make a world of a difference of eligibility of a renter rather than flat out using only credit scores.

As a perspective tenant applying for an apt. you would be best to be proactive and provide a written explanation of your salutation. Even a bankruptcy can be explained. Provide a reason for your situation. How you maintained your home up until the end. You had little opportunity to resolve your situation due to an employment or health hardship. Just so long you can provide verification of your ability to make current and future payments will certainly go a long way as a human being looking at you eligibility. Shoe how you have reduced your debt load... Show you have paid your credit cards ontime. Show your insurance is always paid on time. Very important factors to determine a persons ability to pay their rent.

But looking at what affects your credit more... Foreclosure is a hard hitter as well as bankruptcy. A short sale really does not show up on your credit report. There is no short sale classification on the credit report therefore banks and reporting agencies use such terms as paid less than agreed. You negotiator should not only negotiate the deficiency but also the way you are reported to a credit agency. That does not mean you require the bank to report your short sale any differently, but when you ask for the approval letter, you will want the bank to provide terminology of paid in full or satisfied and, or paid as agreed with no deficiency or something you can go back to later in about 6 months to negate a credit reporting that shows negative information. Also late payments on a credit report show up stronger than most anything else.

A short sale will affect your rating approx 60-80 points. But late payments can hit you as much as 200 points or more. So not being late is very important. But rarely you find a person doing a short sale who is not late on their payments.

So many of the banks tell their customers "you have to be 60 days late until we can approve a lod mod or a short sale. But this is entirely wrong information and the banks should be held accountable for these actions but they never are.

Most people dont realize they can short sale a home and buy another right away. Circumstances are required but it can be done and I've seen it done. If anyone would like more information I can provide that to you personally... just contact me...

So if you are planning on renting, you are starting in the right direction to plan your situation for the future.

Search foreclosures and short sale here:

Search the MLS on your phone by Text: In the subject line on your mobile phone- LSAR1 -to number 87778 ... hit send... A GPS feature for listings at your finger tips

Larry Sarlo When you want it Sold Fast!
RE/MAX Preferred
609-868-1171 call / text / email 7 days
415 Egg Harbor Rd st 9 Turnersville, NJ 08080
0 votes Thank Flag Link Sun Sep 30, 2012
I would say that if your decision is whether to do a short sale or go through a foreclosure, you are better off doing a short sale for many reasons. Your credit will not be impacted as bad and you will be able to restore your credit sooner. Besides talking to your attorney, you might also speak with your tax advisor and a realtor in your area that does short sales.
0 votes Thank Flag Link Sun Sep 30, 2012
As per earlier responses its a case by case basis. However most people look at the short sale as the responsible thing to do. In a Landlords situation most view it as you were unable to pay the bills after you tried every option, and you accepted that you would need to move and handed the home over in a responsible way. Most Landlords I know view foreclosure as you knew you couldnt fix it well before Sheriff's sale yet continued to stay there anyway and wait it out. Not everyone will think this way but this is what I have typically dealt with.

William F. Troy
REO/HUD Director
Pre-foreclosure Specialist Mastery Certification
RDC PRO, SRES, e-PRO, CDPE, Luxury Home Team
Veltri & Associates Realtors
121 Washington St.
Toms River, NJ 08753
Office-(866)483-5874 ext. 422
Cell- (732)600-1570
Fax- (732)557-6425
0 votes Thank Flag Link Sun Sep 30, 2012

There is no clear-cut answer, however, if you're simply asking about TRENDS and an "on the average" sort of answer, I would say the short sale. Someone could be in a short sale situation not necessarily because they can't pay their bills, but because they need to move (say, a job relocation) and their house is worth less than what is owed on it. In the case of a foreclosure, most of the time this is the result of a homeowner not being able to pay their mortgage every month, no matter WHAT the reason. Again, it could be something that is beyond one's control (e.g. a single mom going through a divorce; she may have gotten the house, but she can't afford the monthly payment), but foreclosure does carry a negative connotation to it. In either case, some explanation to the landlord might be in order if asked about it.

0 votes Thank Flag Link Sun Sep 30, 2012
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