Short sale vs. foreclosure in Washington (and a faster third option)
Short sale vs. foreclosure in Washington: how each affects your credit, your debt, and your future — plus a faster third option that avoids both.
If you can't keep your home, the question becomes how to let it go with the least damage. In Washington the two paths people compare most are a short sale and a foreclosure — but there's often a faster third option. Here's how they stack up.
Foreclosure
The lender forces a trustee's sale. It's the most damaging to your credit (the foreclosure mark stays seven years), you have no control over timing, and you risk losing any equity to the auction. The one silver lining in Washington: after a non-judicial sale of your primary residence, the lender generally can't pursue you for a deficiency (RCW 61.24.100).
Short sale
If you owe more than the home is worth, the lender agrees to accept less than the full balance so you can sell. Credit damage is real but usually less severe than a foreclosure, and you avoid the foreclosure mark. The trade-off: short sales take lender approval and can be slow, so they need to start well before the sale date. We can negotiate the short sale with your lender for you.
The third option: sell before the sale (often for cash)
If you have equity, you don't need a short sale at all — you can simply sell before the trustee's sale and keep the difference. A cash sale closes fast (often before the sale date), requires no repairs or showings, and charges no commissions. You avoid both the foreclosure and the long short-sale negotiation. See selling before foreclosure.
Quick comparison
- Credit: foreclosure worst; short sale and pre-sale both better.
- Speed: cash sale fastest; foreclosure on the lender's clock; short sale slowest.
- Your equity: you keep it in a pre-sale; little/none in a short sale or foreclosure.
- Control: you choose the date in a sale; you don't in a foreclosure.
Not sure whether you have equity? That's the key question — and we can help you figure it out free, then point you to whichever path serves you best.
This article is general information for Washington homeowners, not legal or financial advice. For free help, call the Washington Homeownership Hotline at 1-877-894-HOME or a HUD counselor at 1-800-569-4287.
FAQ
Does a short sale hurt my credit less than foreclosure?
Generally yes. Both lower your score, but a short sale avoids the foreclosure mark and homeowners often recover faster.
Will I owe money after a short sale or foreclosure in Washington?
After a non-judicial foreclosure of your primary home, the lender generally can't pursue a deficiency. In a short sale, ask the lender to waive any deficiency in writing as part of the approval.
Which is faster?
A cash sale before the trustee's sale is usually fastest. Foreclosure runs on the lender's timeline, and short sales can take the longest because they need lender approval.
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