Short Sale And Foreclosure How Are They Different

Dated: 01/23/2018

Views: 27

Image title

As unfortunate as it can be when homeowners fall behind on mortgage payments and must face the possibility of losing their homes, short sales and foreclosures provide them options for moving on financially. The terms are often used interchangeably, but they’re actually quite different, with varying timelines and financial impact on the homeowner. Here’s a brief overview.

A short sale comes into play when a homeowner needs to sell their home but the home is worth less than the remaining balance that they owe. The lender can allow the homeowner to sell the home for less than the amount owed, freeing the homeowner from the financial predicament.

On the buyer side, short sales typically take three to four months to complete and many of the closing and repair costs are shifted from the seller to the lender.

On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home so the bank begins the process of repossessing it. A foreclosure usually moves much faster than a short sale and is more financially damaging to the homeowner.

After foreclosure the bank can sell the home in a foreclosure auction. For buyers, foreclosures are riskier than short sales, because homes are often bought sight unseen, with no inspection or warranty.

Image title


Blog author image

Joan Henderson

I began my Real Estate Career in 1998. My husband, Mark, is a residential builder and needed a Real Estate Agent to list his homes - and who better to do that for him! I specialize in Residential, Vac....

Want to Advertise on this Site?

Latest Blog Posts

THE KEY TO SUCCESSFUL HOME STAGING

Menu HOME SELLERS PORTABLE STORAGE: THE KEY TO SUCCESSFUL HOME STAGING UPDATED DECEMBER 29, 2017 REALTY EXECUTIVES INTERNATIONALLEAVE A

Read More

Apr 18 2018 14025 1

 How Much Do You Need to Make to Buy a Home in Your State?It’s no mystery that cost of living varies drastically depending on where you live, so a new study by GOBankingRates

Read More

5 Simple Steps For A Better Home Appraisal

If you’re looking to refinance your home or possibly sell, you’ll need a killer appraisal. A bank will not refinance a home for more than it is worth, and a potential buyer will not pay more

Read More

Better Stronger Faster

I have just been initially trained in a groovy new software.  Normally, I learn software fairly quickly, but this one, I can already tell, is going to take a bit of time to master.  No

Read More