Friday, August 19, 2022
Chuck Marunde, J.D., Broker/Owner 360-775-5424


iRealty Virtual Brokers


Broker/Consultant

Washington State

SUBSCRIBE
  • Home
  • Search MLS
    • Sequim MLS
    • Sequim MLS Map Search
    • Port Angeles MLS
    • Port Townsend MLS
    • San Juan Islands MLS
    • All Islands MLS
    • How to Search the Sequim MLS
  • Videos
    • Sequim Videos Q&A
    • Buyer Videos Part 1
    • Buyer Videos Part 2
    • Buyer Videos Part 3
    • Buyer Videos Part 4
    • Living in Sequim Video Channel
  • Books
    The Coming Real Estate Crash

    The Coming Real Estate Crash

    The Sequim Real Estate Trilogy

    The Sequim Real Estate Trilogy

    Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

    Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

    Escaping California to the San Juan Islands

    Escaping California to the San Juan Islands

    Get Healthy

    Get Healthy: Increase Natural Immunities, Cellular Energy, Deep Sleep & Decrease Blood Pressure

    Manage Your Energy

    Manage Your Energy Not Your Time

    Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

    Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

    7 Myths of Selling Your Home

    7 Myths of Selling Your Home

    Buying Your Retirement Home

    Buying Your Retirement Home

    The New World of Marketing for Real Estate Agents

    The New World of Marketing for Real Estate Agents

    Sequim Real Estate For Buyers: Free eBook Updates Forever

    Sequim Real Estate For Buyers: Free eBook Updates Forever

    24 Secrets of Buying a Country Home

    24 Secrets of Buying a Country Home

    Sequim Real Estate: A Buyer’s Guide

    Sequim Real Estate: A Buyer’s Guide

    Living Off The Grid iin Alaska

    Living Off The Grid in Alaska

    Buying and Selling Real Estate

    Buying and Selling Real Estate

    Trending Tags

      • Sequim Real Estate for Buyers (Free eBook Updates Forever)
      • Sequim Real Estate: A Buyer’s Guide (Paperback)
      • Escaping California to The San Juan Islands
      • Buying & Selling Real Estate in The Rain Shadow
      • Real Estate From Bricks & Mortar to High Tech Virtuality
      • The Seven Myths of Selling Your Home
      • Buying Your Retirement Home
      • The New World of Marketing for Real Estate Agents
    • Agents
      • Professional Buyer’s Agent
      • Flat Fee Listing Broker
    Tetralogy
    No Result
    View All Result
    • Login
    • Register
    • Home
    • Search MLS
      • Sequim MLS
      • Sequim MLS Map Search
      • Port Angeles MLS
      • Port Townsend MLS
      • San Juan Islands MLS
      • All Islands MLS
      • How to Search the Sequim MLS
    • Videos
      • Sequim Videos Q&A
      • Buyer Videos Part 1
      • Buyer Videos Part 2
      • Buyer Videos Part 3
      • Buyer Videos Part 4
      • Living in Sequim Video Channel
    • Books
      The Coming Real Estate Crash

      The Coming Real Estate Crash

      The Sequim Real Estate Trilogy

      The Sequim Real Estate Trilogy

      Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

      Sequim Real Estate Videos for Buyers: The Ultimate Video Guide for Sequim Washington

      Escaping California to the San Juan Islands

      Escaping California to the San Juan Islands

      Get Healthy

      Get Healthy: Increase Natural Immunities, Cellular Energy, Deep Sleep & Decrease Blood Pressure

      Manage Your Energy

      Manage Your Energy Not Your Time

      Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

      Real Estate Brokerage From Bricks and Mortar to High Tech Virtuality

      7 Myths of Selling Your Home

      7 Myths of Selling Your Home

      Buying Your Retirement Home

      Buying Your Retirement Home

      The New World of Marketing for Real Estate Agents

      The New World of Marketing for Real Estate Agents

      Sequim Real Estate For Buyers: Free eBook Updates Forever

      Sequim Real Estate For Buyers: Free eBook Updates Forever

      24 Secrets of Buying a Country Home

      24 Secrets of Buying a Country Home

      Sequim Real Estate: A Buyer’s Guide

      Sequim Real Estate: A Buyer’s Guide

      Living Off The Grid iin Alaska

      Living Off The Grid in Alaska

      Buying and Selling Real Estate

      Buying and Selling Real Estate

      Trending Tags

        • Sequim Real Estate for Buyers (Free eBook Updates Forever)
        • Sequim Real Estate: A Buyer’s Guide (Paperback)
        • Escaping California to The San Juan Islands
        • Buying & Selling Real Estate in The Rain Shadow
        • Real Estate From Bricks & Mortar to High Tech Virtuality
        • The Seven Myths of Selling Your Home
        • Buying Your Retirement Home
        • The New World of Marketing for Real Estate Agents
      • Agents
        • Professional Buyer’s Agent
        • Flat Fee Listing Broker
      No Result
      View All Result
      iRealty Virtual Brokers
      No Result
      View All Result
      Home Foreclosures

      Foreclosures, Short Sales, and Credit Scores

      Chuck Marunde by Chuck Marunde
      July 21, 2009
      Reading Time: 2 mins read
      0 0
      8

      What effect does a foreclosure or a short sale have on your credit score? Negatives on a credit report are scored by three factors: recency (how recently did the negative event occur), severity (how late is the payment) and frequency (how many times you’ve been reported delinquent on credit obligations). If you have payments in default on a mortgage, your credit score is taking some hits, but if you have a foreclosure, you will not be able to get a Fannie Mae or Freddie Mac backed loan for five years.

      If you have a home for sale that is threatened by a possible foreclosure, you may have to try to sell it for less than the current mortgage balance. If your mortgage company accepts less than what is owed, that is a short sale. Trying to do a short sale is not for the inexperienced homeowner or the inexperienced real estate agent. It’s very technical, and you don’t want to screw it up.

      Lenders prefer short sales over foreclosures because they net more from them. Foreclosures incur additional legal costs and fees, carrying costs, and marketing costs. Your credit score is downgraded with a short sale, but not as much as a foreclosure.   Borrowers can be considered for loans following a short sale after 24 months, if the sale was caused by extenuating circumstances outside of a borrowers’ control, or 48 months if it was the result of financial mismanagement on the borrower’s part of the homeowner.

      There are potential tax implications with a short sale.   The IRS code penalizes you if you do a short sale by taxing you on the forgiven portion of the loan, the difference between what you owed and what the mortgage company accepted in the short sale. It’s hard to believe that our government would tax you on a short sale when you are already in severe financial hardship, but who said our tax code was fair?

      Because of public outcry, congress made an exception to the IRS code. The Mortgage Forgiveness Debt Relief Act of 2007 and the recently passed Emergency Economic Stabilization Act allows you to exclude up to $2 million of income ($1 million if married filing separately) from debt that’s discharged through mortgage restructuring, or that’s forgiven in connection with foreclosure, for the years 2007 through 2012. The exclusion must be connected with a decline in the home’s value or the taxpayer’s financial condition, and only applies to a principal residence, not investment properties.

      If you own a home you need to sell, this is absolutely not a time to experiment with selling prices and marketing.   It’s not a time to hire an inexperienced real estate agent.   You may only get one chance to do it right, and time is your enemy.   If you do everything right from the beginning, in four or five months, if your lucky you’ll have a closed sale.   Trip along the way on any of dozens of steps, and you will lose, and the consequences could be devestating.   The key to getting it right is finding an experienced professional who knows exactly what to do and when to do it.

      Last Updated on July 21, 2009 by Chuck Marunde

      Tags: credit scoresForeclosuresshort sales
      ShareTweet
      Chuck Marunde

      Chuck Marunde

      Chuck grew up in remote Alaska, graduated from the University of Alaska with a degree in Economics and Teacher Certification, and after teaching high school for two years, went to law school at Gonzaga University in Spokane, Washington. He served four years as a Captain and JAG in the USAF at Nellis AFB in Las Vegas. After practicing real estate law for 20 years in Washington, Chuck founded iRealty Virtual Brokers covering Sequim and the beautiful Olympic Peninsula. He is the author of 2,200 real estate articles and a dozen real estate books, and he produced over 100 real estate videos. Chuck combined his love for real estate and technology to create a massive Internet presence, and his articles and videos and books have been viewed by millions. Chuck is a well recognized real estate expert and his counsel is sought by other brokers and practicing attorneys around the country. Buyers from New York to Hawaii and from Florida to Alaska seek him out to retain him as their buyer's agent, and home owners around the State of Washington seek him out because of his new Flat Fee Listing Service. 

      Related Posts

      Marunde-Books
      Sequim Real Estate

      Marunde Books: I’m Having Far Too Much Fun Here

      August 15, 2022
      7
      Sequim Real Estate
      Sequim Real Estate

      Massive Upgrades to Sequim Real Estate Blog

      August 11, 2022
      19
      Sequim Home
      Sequim Real Estate

      Is Sequim Always Sunny?

      August 11, 2022
      11
      Chuck Marunde
      Sequim Real Estate

      Sequim Real Estate Videos Organized in an EBook

      May 11, 2021
      3
      Sequim Home
      Sequim Home For Sale

      The Six Steps to Finding Your Sequim Home

      February 3, 2021
      3
      Real Estate Books
      Sequim Real Estate

      Real Estate Books

      August 14, 2022
      5
      Next Post

      Beware the Discount Home Builder

      vacant land

      Purchasing Vacant Land Checklist

      Comments 8

      1. Va Foreclosure Sale says:
        14 years ago

        Hello, I found your blog via Google while searching for va foreclosure sale and your post regarding losures, Short Sales, and Credit Scores looks very interesting for me

        Reply
      2. Ken Obrien says:
        13 years ago

        What a great-easy to read article on such complex topic. Thanks Chuck!

        Reply
      3. Doug Orlando Real Estate says:
        13 years ago

        Yes, this website gives extensive information, just found it a couple of days ago and I have already returned here quite many times just to red the views on many topics.

        Reply
      4. Real Estate Mike says:
        13 years ago

        This is a great real estate blog…lots of useful information!

        Reply
      5. Learning Centre says:
        12 years ago

        This post is filled with useful information. I did not know that there were potential tax implications associated with a short sale. Thanks to you, I’m enlightened 😀

        Reply
      6. build mortgage says:
        12 years ago

        It is nice of the government to take money from you when you need it most when going through the proceedings of a short sale. But like the article says it’s better than a foreclosure and you can recover quicker financially and get on with life and maybe try again, but better managed.

        Reply
      7. Jeremy says:
        12 years ago

        I have to agree with the others. This is some outstanding advice. I am learning more and more. Thank you for sharing this.

        Reply
      8. Daniel McClain says:
        11 years ago

        Thanks for the information about Sequim and Port Angeles. Very good.

        Reply

      Leave a Reply Cancel reply

      Your email address will not be published. Required fields are marked *

      I agree to the Terms & Conditions and Privacy Policy.

      This site uses Akismet to reduce spam. Learn how your comment data is processed.

      "I wish I read this before selling my
      home. I could have saved $50,000." Andy 

      Search 2,200 Articles by Category

      • Trending
      • Comments
      • Latest
      Buyer and Seller

      What if a Buyer and Seller Talk to Each Other?

      August 5, 2022
      10 Best Places to Retire

      Why is Sequim One Of The 10 Best Places To Retire?

      September 22, 2019
      Prorate Propane

      How to Prorate Propane at Closing

      August 15, 2015
      Terminate a real estate contract

      How to Terminate a Real Estate Contract

      December 31, 2020
      print newspapers

      Print Newspapers Losing Readers to the Internet

      42
      FNMA Killing Transactions by Requiring Private Road Maintenance Agreements

      FNMA Killing Transactions by Requiring Private Road Maintenance Agreements

      31
      Buyer and Seller

      What if a Buyer and Seller Talk to Each Other?

      28

      What Documents Does a Buyer Need to Buy Real Estate?

      24
      Best Sequim MLS

      Best Sequim MLS Site New Features

      August 18, 2022
      Listing Broker

      True Story: Caveat Emptor or Buyer Buyer

      August 18, 2022
      NWMLS v OLS

      Why the NWMLS is Far Better Than the OLS for Sellers in the Sequim Market

      August 16, 2022
      Marunde-Books

      Marunde Books: I’m Having Far Too Much Fun Here

      August 15, 2022

      Subscribe to Chuck 
      Marunde's Newsletter

      Popular Stories

      • Buyer and Seller

        What if a Buyer and Seller Talk to Each Other?

        0 shares
        Share 0 Tweet 0
      • Why is Sequim One Of The 10 Best Places To Retire?

        0 shares
        Share 0 Tweet 0
      • How to Prorate Propane at Closing

        0 shares
        Share 0 Tweet 0
      • How to Terminate a Real Estate Contract

        0 shares
        Share 0 Tweet 0
      • The Sequim Blue Hole – A Map of Rainfall

        0 shares
        Share 0 Tweet 0

      Leaving Comments   I hope you’ll join our community and leave comments from time to time. Please realize that comments, if approved, will be public, so do not use any personal information you don’t want broadcast to the world, and definitely don’t leave a phone number. Comments are not the place to ask Chuck Marunde for help in finding a home. To do that, call or text Chuck.

      Neither Chuck Marunde nor iRealty Virtual Brokers offers legal advice on this site. Please Read Our Legal Disclaimer

      If you’d like to view how we protect your privacy, see our Privacy Policy.

      iRealty Virtual Brokers

      iRealty Virtual Brokers reaches out to buyers around the United States with thousands of online articles, MLS sites, apps, real estate books, videos, and much more specifically to help buyers find all the answers to their questions. We also now offer a flat fee commission listing service that saves sellers tens of thousands of dollars.

      iRealty Virtual Brokers
      125 Olympic Ranch Ln
      Sequim, Washington 98382
      360-775-5424

      Search the entire NWMLS in Washington State:

      Sequim-Homes.com

      The largest independent real estate blog in the State of Washington with over 2,200 articles totally focused on our client’s best interest, their needs and their curiosity. All free and 100% reliable. I’m here if you need me, 

      © 2006-2022 iRealty Virtual Brokers and Chuck Marunde

      No Result
      View All Result
      • Home
      • Search MLS
        • Sequim MLS
        • Sequim MLS Map Search
        • Port Angeles MLS
        • Port Townsend MLS
        • San Juan Islands MLS
        • All Islands MLS
        • How to Search the Sequim MLS
      • Videos
        • Sequim Videos Q&A
        • Buyer Videos Part 1
        • Buyer Videos Part 2
        • Buyer Videos Part 3
        • Buyer Videos Part 4
        • Living in Sequim Video Channel
      • Books
        • Sequim Real Estate for Buyers (Free eBook Updates Forever)
        • Sequim Real Estate: A Buyer’s Guide (Paperback)
        • Escaping California to The San Juan Islands
        • Buying & Selling Real Estate in The Rain Shadow
        • Real Estate From Bricks & Mortar to High Tech Virtuality
        • The Seven Myths of Selling Your Home
        • Buying Your Retirement Home
        • The New World of Marketing for Real Estate Agents
      • Agents
        • Professional Buyer’s Agent
        • Flat Fee Listing Broker
      • Login
      • Sign Up

      © 2006-2022 iRealty Virtual Brokers and Chuck Marunde

      Welcome Back!

      Login to your account below

      Forgotten Password? Sign Up

      Create New Account!

      Fill the forms bellow to register

      *By registering into our website, you agree to the Terms & Conditions and Privacy Policy.
      All fields are required. Log In

      Retrieve your password

      Please enter your username or email address to reset your password.

      Log In
      This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.