SHORT SALE AND FORECLOSURE: HOW ARE THEY DIFFERENT?
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.
If you have questions on either selling your home (or buying) a short sale or foreclosure, please give me a call. I will be glad to walk through the process with you.
About eXp Realty California - Northern / Central Valley
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"Colleen was excellent at communicating with the seller and sending information back and forth. She was also very proactive in helping me chose a lender and staying up to date with the lender to mak e sure things progressed in a timely manner. She was very aware of the timing of all the deadlines throughout the process and kept things moving very efficiently. Colleen has been providing real estate service in the community for over 15 years and is a great choice for any buyer or seller, private home or commercial properties. I have several other friends who have also used Colleen's services and were very satisfied."