How do foreclosures effect my credit score?

Sellers take as big a hit on their credit report by going through foreclosure as giving the lender a deed-in-lieu of foreclosure.
Points lost on a FICO score are:

Foreclosure or Deed-in-Lieu of Foreclosure
Both of these solutions affect credit the same. Sellers will take a hit of 200 to 300 points, depending on overall condition of credit. This means if a seller's FICO score before foreclosure was 680, it could dip as low as 380.

Short Sale
The effect of a short sale on a seller's credit report is identical to that of a foreclosure. The hit on your credit will show up as a pre-foreclosure in redemption status, This results in a loss of 200 to 300 points. This means a short sale with a previous FICO of 720 will see it fall from 520 to 420.