She’s not only the founder of Foreclosures.com, a website that provides investors and homeowners with foreclosure information and guidance, she’s also a member herself. Alex McGee, known as the “foreclosure guru” recently fell behind on the mortgage payments for her custom designed 4,775 square foot home, and was faced with a tough decision. A decision she’s recommended many times to her investor clients and homeowners over the years.
After a failed attempt at a loan modification, McGee took her own advice and decided to cut her losses by short selling her dream home, and downsize rather than face foreclosure.
A short sale is when a lender agrees to accept a payoff, through a sale, for less than what is owed. A foreclosure is when the lender takes ownership of the property, and assumes responsibility for selling it via real estate agent or auction. Typically a short sale is more favorable than a foreclosure as it doesn’t impact credit rating as negatively. A short sale may ding your credit 50 to 130 points, while a foreclosure can lower your credit score 200 to 400 points.
Luckily for McGee, her expertise in real estate foreclosures will help her navigate the process with more ease. Unfortunately McGee took quite a hit on the value of her primary residence. She expects the home to be sold for slightly under $1 million, although it was worth $3 million when she and her husband began building it in 2007.
Read the full article on Aol Real Estate.