Connect with us


Deciding What’s Best For You: Short Sale vs. Foreclosure

If your home is underwater, you’re likely desperately searching for a way out while mitigating the damage to your finances and credit as much as possible. This can seem like an exhausting task, and it is, both emotionally and financially.
If you owe more on your home than what you can pay back to your mortgage lender with no foreseeable way to improve your ability to make payments in the future, this is all about damage reduction, and a short sale may be your best option for minimizing the blow. Foreclosure may not be the only answer, and understanding the difference between a short sale and a foreclosure may provide an invaluable solution.

Why a Short Sale Isn’t a Foreclosure
If you haven’t read our post on the basics of a short sale, it may help to read through that first.
The primary difference between a foreclosure and a short sale is that a foreclosure comes when a bank actively contacts the home owner and threatens to – and eventually proceeds to – repossess the home in order to exact payment on the deficit of a mortgage loan which the home owner has proven incapable of making good on. The bank then comes into ownership of the home and can resell it at market value as a foreclosed home. After that, the bank then has the right to try to get the previous homeowner to fulfill the loan deficiency, even though he or she was obviously unable to do so from the start of the foreclosure. Generally this results in bankruptcy on the homeowner’s part.
The Difference in Selling
Think of the difference in terms of selling and billing.
During a foreclosure, the bank repossesses the home and resells it themselves, leaving the previous homeowner with nothing, plus a bill.
During a short sale, the homeowner takes the role of seller, but owes more on the house than what it’s worth in the market, thus promising a deficit even in a successful sale. The seller then makes an arrangement with the bank, implying a mutual transaction rather than a forceful taking away. The seller walks away with nothing; that’s it.
Credit Differences
Foreclosures, it stands to reason, are much harder on credit scores than short sales. A short sale doesn’t come without penalty, but since a foreclosure is much harsher, involves no mutual agreement on the bank’s part, and often results in bankruptcy, foreclosure should be avoided at all costs if a short sale or other option is possible.
Seeking Help
If you’re staring down foreclosure, seek the help of a short sale expert today to see what your options are and if a short sale may be possible.
Bryce Emley wrote this article on behalf of the Short Sale Experts of Rothwell Gornt Homes, a Las Vegas based real estate company.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

Recent Posts

Business3 days ago

Why Is Quantity Surveying Essential in Construction Industry

Quantity surveying is an essential part of the Australian construction industry. It is the process of calculating and estimating the...

Home Improvement5 days ago

How to Maintain Upholstered Furniture

No matter if you have pets or kids, maintaining your upholstered furniture is quite a challenge. Even though vacuuming it...

Business1 week ago

How Do I Find a Good Developer?

Finding a good bubble developer to help build your app or digital product can seem challenging. How can you choose...

Home Improvement2 weeks ago

When is a right time for home repairs?

Summer is a popular time for a renovation around the globe. While it is true that bright days and warm...

Top Alteryx Competitors Top Alteryx Competitors
Tech4 weeks ago

Top 15 Alteryx Competitors

The world has seen a tremendous rise in startups and new incorporations in the business world. Companies have great potential...

Lifestyle1 month ago

Latest Wedding Trends for 2023

If you’re planning on getting married this year, chances are you’re probably overwhelmed and confused when it comes to wedding...

Lifestyle1 month ago

Tips To Make The Most Of Your City Break In London!

London is one of the best cities in the world, known for its quintessentially British culture, great nightlife, fantastic museums...

General1 month ago

The Ultimate Guide To Packing For A Trip To London

London is one of the best cities in the world, known for it’s rich history, quintessentially British culture, the best...

Tech2 months ago

Top 15 Web Development IDEs

The web development field has seen sustainable growth throughout the years. As technology is advancing, so is the web development...

devops devops
Tech2 months ago

12 Key DevOps Programming Languages to Still Popular in 2022

“DevOps is not a goal, but a never-ending process of continual improvement.” – Jez Humble Delivering the finest of services...

Entertainment2 months ago

Festival Fashion Style Tips For 2022

Summer is well and truly here and with that comes the festival season! From the biggest stars performing on stage...

Green & Energy2 months ago

4 Tips For Making Your Wardrobe More Sustainable

Everyone is trying to make more of an effort to make their wardrobe more sustainable, but often are unsure where...

General3 months ago

7 tips on how to organize a budget-friendly move

If you are planning a move any time soon, you might be worried about all the expenses that wait for...

Metal Roof Colors Metal Roof Colors
Home Improvement3 months ago

Metal Roof Colors: How to Select the Best Color for a New Roof

Choosing the right type of material for your roof is enough of a hassle already that the question of choosing...

Health3 months ago

Simple Ways To Feel More Confident At The Gym

If you are new to the gym, or you haven’t been in a while, sometimes you might not feel completely...