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 are interested in purchasing a short sale or foreclosure do not hesitate to call one of us for advice!
Derrick Rittenbach 701.333.9155
Tisa Peek 701.214.1188
Author:Derrick Rittenbach Phone: 701-333-9155 Dated: February 4th 2019 Views: 120 About Derrick: Derrick became a Realtor in 2016. He is new to real estate but is not new to the real estate indust...
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