Underwater? Pros and Cons of Trying a Short Sale

Posted on by The Tim

Seattle Bubble regular Kary Krismer recently wrote a pair of posts drawing on his legal and real estate experience to give a relatively unbiased look at the factors to consider when you’re thinking about whether you should or shouldn’t try a short sale if you’re underwater and want to get out of your home.

On the pro side:

  1. Avoid a Foreclosure on Your Record
  2. Less of an Impact on Credit Scores
  3. Shorter Time to a New Loan
  4. Less Embarrassment
  5. Possible Waiver of Deficiency on Junior DOTs
  6. Tax Consequences
  7. Extend Time In House (“Free Rent”)

And on the con side:

  1. Less Time in House (Less “Free Rent”)
  2. Possible Deficiency
  3. Tax Consequences
  4. Annoyance of Selling an Occupied Home
  5. “Manufactured” Judicial Foreclosure
  6. Potential Liability to Buyer

Click through to the pro or con post for his full write-up of each reason.

What about you? If you were (or are) underwater on a home that you don’t want to (or can’t) keep anymore, would you give a short sale a try? Why or why not?