Deed in Lieu of Foreclosure or Short Sale?

by Isaac Benmergui, Esq on October 14, 2011

You need to get out from under your mortgage, but you don’t know whether to offer your home back to the bank or look for a short sale buyer. Which is better?

The first thing to know is that both will adversely affect your credit score, so there’s no save there. Before you can consider a deed in lieu of foreclosure, where you simply sign a few pieces of paper and walk away, you’ll need to know whether your lender will accept the deed. Most lenders want short sales because you find the buyer; whereas a deed in lieu gives the lender an empty home and no buyer.

In a foreclosure and short sale, you’ll have more time to look for a new place to live. With a deed in lieu, you’ll need to have everything already out of the house.

Lastly, you may still owe the lender money if the home sells for less than what you owed. Ask the lender for a letter releasing you from the house debt when you hand over the keys.

Getting Legal Help

The law offices of Isaac Benmergui can help you with your legal real estate needs; call 780-800-2510 or email Isaac@benmerguilaw.com for more information or to set up an appointment today.

Previous post:

Next post: