short sale or give back to bank

this is an extension of my last question. my best friend is about to loose her home to a foreclosre but she has it in realty. she told me today that the bank (small town – everyone knows everyone) said they would take back the house without any forclosure on her record, her and her husband will just leave the house (i guess) and the bank will sell it on their own. but her real estate agent is pushing for a short sale and im sure they are doing that to still get some kind of commission. which way would be better – give the home back to the bank with no forclosure or have a short sale?

thanks ahead
She does have some equity in the home, but with the market now, no-one is buying, at her asking price now she will only come out with 25,000.00 after realestate fees and payoff. she would like to use this money to get started somewhere else with less of a monthly payment. if she short sales or gives back to the bank she will have no money to get started somehwere else and with bad credit on top of that… what to do?

That would depend on how much equity they have in their home. If there home is appraised at a lot more than the loan balance, try to sell it. That way, your friend might at least make a profit from it. They did pay money into it. It’s only fair that they get something out of it. If however they lost value on it since purchasing, they might want to go with the bank’s idea. But, whatever you do with the bank, get it in writing. Just because it doesn’t show up as a foreclosure doesn’t mean it can’t show up as a deficient account and turn into a collection account.