What to do, Military short sale or not?

Asked by kimortega69, Boise, ID Sun Feb 3, 2013

My husband is active military and he bought a house 5years ago, and pcs'd 600 miles away 3years ago. We have been renting this place and are now tired of loosing money and want to put it on the market.
We are under water for $45000. We are thinking about the shorts sale option now.
He FICO score is 790ish and I'm worried about how low his FICO score will go down after a short sale.
I also worried about his clearance for his career too. He is an officer and I'm also worried what this will do anything for any future promotions? Should I do a short sale or should we keep renting it out and deal with all of these headaches?

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Cyrus Bonnet’s answer
Cyrus Bonnet, Agent, Tacoma, WA
Sun Feb 3, 2013
update: As far as the security clearance is concerned, When i was in the Army I worked close to the S-2 shop that issues security clearances and never heard of anyone getting there clearance pulled due to distressed situations out of their control. The only time they were pulled where for severe disciplinary actions such as breaking the law or AR's. I have helped many soldiers with bad credit whom had top secret clearances and only a letter of explanation was required to maintain it. It is however one of the many checks in determining the clearance thus my advice to go to JAG. It would serve him well to discuss this with his CO and ask the S-2 shop if his credit being dropped will affect him and his career. Every job in the military has a level of importance that can influence these decisions. As Jim mentioned short sales are on the rise and are becoming increasingly common for military CO's to consider. Jim is also correct when it comes to attorneys, you may have to find one with a good rapport because some don't seem to do there job well and some do. Or you can hire a realtor specialized in negotiating the short sale for you whom has your best interest in mind. Jim's a good source of info and I'm pretty sure he negotiates them.
hope this helps clarify my last response.
1 vote
I hire a professional negotiator. I learned a long time ago that I excel at serving my clients, and that I do not do well dealing with banks and the folks they hire to handle short sale files. In 3+ years of short sales, the success rate has been really great once I learned to find the right resource for the negotiations.

Thanks Cyrus, and I personally hope they find the answer they are looking for and soon. The sooner they decide, the sooner they get to move on.
Flag Sun Feb 3, 2013
Ron Thomas, Agent, Fresno, CA
Sun Feb 3, 2013
Being TIRED orf losing money is not a good reason for doing anything:
I know it sounds good; but one way or another, you are not through losing money.
It doesn't matter if it is your fault; so forget about that too.
You feel you are going to lose $45,000;
two questions:
How do you know that? Have you had a Realtor do a CMA to determine the house's worth?
Have you figured out how much you will lose if you do a Shortsale?

Also, has he talk to anyone in the military about your situation?
How much are losing each month? You have it rented, can you hold on longer?
It is not an emotional time, and it is not back and white either.
Just imagine how you'll feel 3-4 years from now, if you can make it through?
I'm rooting for you!
1 vote
Brett Tousley, , Tacoma, WA
Mon Feb 4, 2013
Ron Thomas gave you some very good advice below. I know you feel like you are in a miserable situation, but it's important to weigh the facts of the situation.
There are many things to consider that can't be covered on an Internet forum like this. Best advice is to speak with a Real Estate attorney (preferably one experienced working with active duty clients).

Depending on your situation and your goals, there may be better options for you than a short sale.

Make your decision based upon your head and not your heart and you'll find the best solution for your family!
0 votes
Jim Swanson, Agent, Tacoma, WA
Sun Feb 3, 2013
I did just complete a VA Short sale for a C-17 Pilot and he did check with his sources in the military and they told him the credit score was explainable due to the short sale and that it was not going to have a negative impact on his security clearance.

If you would like I can connect you to him and you can ask about his experience, and maybe this will help you decide what is best for you.

Cyrus is correct about seeking legal counsel, but I will tell you that the folks I have sent to attorneys have found that the attorneys remain very vague.

You can call the VA and each time you call you can get a different answer. I know, because I called several times to test my theory.

Damage to credit scores is different for most folks because there are so many variables to the credit bureau models.

I too am a veteran and do all that I can to help our service men and women, and this short sale for folks with PCS orders is a big topic in recent years. I would welcome the opportunity to learn more about your situation, and would be able to have you speak with recent sellers I have helped.... and there are quite a few in the last year... all successful.

Regardless of what you decide, I hope you are successful in your endeavors.
0 votes
Alain Picard, Agent, Puyallup, WA
Sun Feb 3, 2013
Your credit does affect your security clearance so don't listen to anyone who says it doesn't. I was in the military and I had a security clearance for my job and I saw people with credit issues who couldn't get the clearance they needed. Give me a call and I would be happy to give you some more information.
0 votes
Dan Tabit, Agent, Issaquah, WA
Sun Feb 3, 2013
The good news is that the market is coming back and prices are going up. If you can stick it out a while longer you may get to keep both the great credit score and all the options having great credit provides. How long, I can't say. I don't know enough about your property, but if you speak with someone in Tacoma you may be able to "estimate" when things may look better.
0 votes
Cyrus Bonnet, Agent, Tacoma, WA
Sun Feb 3, 2013
A short is your best option if your are that far behind, you can have it negotiated through an attorney for best results. usually a short sale consultation is around $150 but they go over all your options, credit scores, etc. his credit will be effected but uncertain how much. As far as your husbands career he should have no problem with his clearance, typically military clearances look for bad behavior, but it wouldn't be a bad idea to talk to JAG and see if they have any input on the matter. What duty station are you currently at? I specialize in helping Soldiers as you will see at my website http://www.soldiersagent.com
There is kind of a lot to go over in these situations. Give me a call or write and I can help get you in front of a short sale specialist, do a comparative market analysis to see what your property is worth on the market today, and go over any questions you may have.
Cyrus Bonnet
0 votes
Miekeba Jones, Agent, Silver Spring, MD
Sun Feb 3, 2013
Hi kimortega69, such a misfortune. Consult a Real Estate Attorney.
0 votes
Stacey Lange, Agent, Kirkland, WA
Sun Feb 3, 2013
I know a great short sale agent in the Tacoma / Spanaway area who is VERY knowledgeable about how shorts sales can affect ACTIVE military -- I strongly encourage you reach out to him and ask his advice. You can message me at staceylange@windermere.com and I will gladly give you his contact info. He helped someone I know and I was thoroughly impressed!
0 votes
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