Short Sales vs. Foreclosures

Short Sale vs Foreclosure – How are they different?


It is extremely unfortunate when homeowners fall behind on mortgage payments. It forces them to face the possibility of losing their home. Short sales and foreclosures do however provide them options for moving on financially. You may be asking yourself “How are they different?” Often times, people use the terms interchangeably. Sometimes we need to be reminded that short sales and foreclosures have varying timelines and financial impact on the homeowner.

Short Sales:

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. This frees the homeowner from the financial predicament.

On the buyer side, short sales typically take three to four months to complete. Often times, the lender will have to assume the fees of the repairs and the closing costs.

Foreclosures:

On the other hand, a foreclosure occurs when a homeowner can no longer make payments on their home. The bank then 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 sometimes riskier than short sales. Believe it or not, these homes are often bought sight unseen, with no inspection or warranty!

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Short Sale vs Foreclosure – How are they different?

Brought to you by Lauren and Stefanie with LS Homes LLC at Realty ONE Group San Diego

2701 Loker Ave W, Suite 150

Carlsbad, CA 92010

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Posted on March 25, 2019 at 7:00 pm
Lauren Panek | Category: Real Estate & Market Trends

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