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Foreclosure vs. Short Sale.

Most mortgage experts agree that sellers will take a bigger hit on their credit score by going through foreclosure versus a short sale.  The effect on credit will show up as a pre-foreclosure in redemption status, which will result in a loss of points on the FICO score. If you're a seller trying to decide whether to let a home go through foreclosure versus attempting a short sale, salvaging your credit is the main advantage to doing a short sale. Always seek legal and tax advice before making any decision regarding a short sale.  Always consult an experienced Realtor when thinking of buying or selling a short sale property.